Tag: alfpc

News – June 2025

No investment advice

Current Positions

Millenium Hospitality Real Estate Socimi SA – $YMHRE

One of my favorite undervalued stocks released its 2024 full-year results, reporting its first accounting profit of €0.10 per share, driven mainly by asset sales and golf operations. The company also announced its first dividend of €0.116 gross per share. To boost profitability, the company should focus on improving operational efficiency to increase margins from hotel leases.

Lower interest rates in the Eurozone should help enhance the company’s valuation. I bought additional shares at €2.40.

On June 16, 2025, the company announced the sale of assets worth €175 million, along with a special dividend of €1.44 per share. This is excellent news: simplifying its structure by selling non-core assets like golf properties and returning profits to shareholders!

Fountaine Pajot – $ALFPC

As I write this, my position in the stock is up 7.11% after a nearly 20% drop when the share price fell to €83. This decline followed the announcement of first-half results, which showed a 5% revenue decrease, possibly influenced by trade war concerns.

The company then announced a share buyback program for 140,000 shares, representing 8.4% of the float, with a total value of €16.8 million. Source.

I haven’t changed my position and am waiting for the full-year results. If the current results hold for the full year, it would be good news, as analysts expect a 17% revenue decline for the year.

Havas

In Q1 2025, the company’s revenue grew by 5.2% compared to Q1 2024.

It paid a dividend of €0.08, offering an average dividend yield of about 5%.

The company announced a share buyback program with a maximum allocation of €50 million, starting on June 2, 2025, and continuing until 2026. Source,

This is good news! However, I believe this type of business may face challenges in the next quarter due to the current macroeconomic situation. Still, the company has strong potential to benefit from artificial intelligence (AI).

New positions

None of these companies have their own posts yet, but I plan to publish one about a company in a couple of days.

Akwel SA

Akwel is a French company that manufactures mechanical parts for the automotive sector. Due to the current challenges in this market, the company’s valuation has been significantly impacted. It is currently trading at just 0.73x its Net Current Asset Value (NCAV), making it a net-net stock. I opened a position in the company on April 13, 2025, at €7.30 per share.

Hunting PLC

I’ll share my investment thesis for this company in a couple of days. Hunting PLC is a British company that manufactures steel tubes, perforating systems, and precision instruments for the Oil & Gas industry. Currently, the company is undergoing restructuring and is starting to expand its products into other industries.

The company is trading below its Tangible Book Value, with a potential upside of 40%. I opened a position on June 5, 2025, at £2.53 per share.

Thank you!

Fountaine Pajot ($ALFPC)

Today I shared this French Microcap (€166M market cap) that designs and builds luxury catamarans. I found out about it because two funds I follow—Independence AM and Amiral Gestion—have positions in it, which seems like a good sign.

Financial Overview

The company’s revenue has grown every year (except for 2009 and 2020). From 2018 to 2024, it saw a 17% CAGR in growth, with a stable EBITDA margin of 13%–15% and an EPS growth of 20% CAGR.

2018201920202021202220232024
Revenue MM136,81207,11172,87202,31219,86276,82351,30
EBITDA21,6626,9327,4132,7034,1942,4967,00
EBITDA Margin %15%13%15,8%16%15,5%15,3%19%
6,668,41
4.8610.069.796,8920,10

Of course, this kind of luxury product is cyclical and requires consistent CAPEX investment, with an average Sales/CAPEX ratio of around 5%. On top of that, the company can generate free cash flow every year.

2018201920202021202220232024
Free Cash Flow27.9215.1913.0551.2546.3619.11-9.69

In 2024, FCF was impacted by increased working capital investments to prepare for next year’s order book.

Regarding debt, the company consistently holds a strong cash position (exceeding its market cap) and keep a low level of debt.

2018201920202021202220232024
Net Debt / EBITDA0.13x-0.17x-0.97x-2.17x-3.11x-2.83x-1.54x

The company pays dividends almost every year, usually between 1%–2%, and do a small amount of buybacks. The issue with the buybacks is the low number of outstanding shares and the lack of liquidity.

So, the company has a history of growth, has a lot of cash in balance (even more than its market cap), avoids dilution, does buybacks, and pays dividends… but why is it still so cheap?

I think several things comes together: Europe microcap, low liquidity and expected drop in sales for next two years due to high post-covid sales.

Next years

The company expect a slowdown of this sales for the next years and it can be inferred due to they highly investment on working capital this year (this going to help FCF next year). The company doesn’t give any guidance butd the analyst expect (17%) 2025E – (6%) 2026E.

But to help to improve the efficiency and partially offset the expected drop sales, the company announce a plan in they last communication:

The new 2028 plan is based on the following major pillars:

  • Product innovation, with the launch of 11 new models: 6 catamarans and 5 monohulls;
  • Enhanced customer service, aimed at improving the experience and satisfaction;
  • A capacity investment and modernization plan, with a total budget of nearly €19 million over four years;
  • Human capital development, through skills enhancement, talent retention, and continuous improvement of working conditions;
  • Environmental commitment, by continuing technical innovations and implementing a zero-carbon trajectory.

Let’s talk about valuation

Comparable companies valuation:

CompanyNTM EV/EBITDANTM MC/FCFNTM P/E
San Lorenzo SpA6.37x18.41x10.90x
Beneteau SA8.29x11.27x16.19x
SA Catana Group5.15x8.92x9.26x
Fountaine Pajot1.66x46.11x7.90x

SA Catana Group is the closest as it focuses on catamarans and has similar ROE, ROIC, and ROA. Plus, it’s also a French microcap.

ROEROICROA
SA Catana Group32%26,4%10,9%
Fountaine Pajot35,2%34,3%10,6%

For this reason, I think Fountaine Pajot’s valuation is ridiculous.

Now, back to valuation—I’d still be very conservative, expecting:

  • 2025-2026: I will use analysts’ estimates of a -10% CAGR revenue and then back to 3% Growth (average catamaran market expected)
  • FCF should improve as the company starts benefiting from positive working capital and customer payments (as it always has).
20252026202720282029
Revenue (M)289262270278286
EBIT Margin % 15%15%15%15%15%
EBITDA (M)44,442,143,44,746
Net Income (M)1816171718
FCF (M)2220212122
Shares Outstading (M)1,61,61,61,61,6

Target Price

For this valuation, I’m expecting some multiple expansion, but still at a discount compared to peers due to low liquidity.

  • EV/EBITDA = 4x
  • MC/FCF = 7x
  • PER = 7x
  • Dividend Yield = 2%
20252026202720282029
EV/EBITDA€183€180€187€193€199
PER€152€146€151€152€162
MC/FCF€167€163€169€175€180

I see an interesting opportunity here, with high expectations for multiple expansion and maybe even an offset to declining revenues!

I opened a 5% weight position at 98.40

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I hold a material investment in the issuer’s securities.