Thermador 2024 numbers
Thermador launched 2024 numbers final Friday. Essentially the most optimistic a part of the discharge is the truth that Thermador manages to place every thing it is advisable to know on two pages with none BS. The numbers had been clearly not good, with gross sales down -13,5% in 2024 and revenue down -23,3%:
On the optimistic facet, Thermador appears to proceed to search for acquisition targets:
At a 2024 P/E of 13,3, Thermador is neither tremendous low-cost nor tremendous costly. In the meanwhile I’ll sit on my arms, but when the share value would go under 60 EURper share, I would add on an opportunistic foundation.
Some ideas on (European) Defence shares
Not too surprisingly, European Defence shares have been on a tear already for a while, solely to additional speed up on the time of writing following the Shitshow that occurred in Mr. Trump’s workplaces on Friday.
For me, Defence shares all the time have been troublesome as they’re typically depending on primarily one group of patrons (Governements) and depend on rare massive orders with vital “covenants”. The listing of disappointments for these shares is lengthy.
However, Defence shares are clearly the momentum shares of the second, because the charts of those chosen European shares present:
Rheinmetall, the German tank and ammunition producer is a 13 bagger over the previous 5 years. Even corporations which have actual issues and just some publicity to Defence, corresponding to Thyssenkrupp are actually in “vertical mode”:
One query I’ve to ask myself is clearly: Wouldn’t it have been in some way sensible and a type of “hedge” to personal among the names because it was clear that Trump gained the election within the US ? In excellent hindsight, this appears apparent. One thing to recollect for the following related state of affairs. Diversification is rarely a foul factor in unstable occasions.
The subsequent query could be: Does it make sense to leap on that Defence FOMO prepare proper now ?
I assume that very a lot is determined by the time horizon one is . Personally, I’m actually an excellent dangerous quick time period momentum investor. Additionally essentially, it isn’t so clear to me to what prolong and how briskly the income of the Defence corporations will improve.
Rheinmetall as an example trades at a trailing P/E of round 70x. Wanting on the final 23 years, we will see that on common, EBIT margins have been single digits and ROCE at finest at 15%.
Sure, EBIT margins did improve and may improve some extra however for me the massive query is the next: There can be clearly a growth in defence spending for a few years however then what ?
This can be a capital intensive trade and Rheinmetall & Co will want to spend so much on PP&A. However until there’s a full blown struggle and/or the Ukraine struggle massively escalates, after a couple of years, Europe may have beefed up its defence capabilities considerably after which the required capability will drop considerably becasue you don’t substitute your tanks or ammunation each 3-5 years.
One other adverse situation could be that the US/Trump stress Europe to massively purchase American weapons with the intention to keep away from punitive tariffs. I feel this situation is just not so unlikely and may also restrict the upside for the European rivals within the mid time period.
To me, the present defence growth appears somewhat bit just like the Renewables growth from 2022 when Russia attacked Ukraine:
Renewable Vitality was hailed as the long run resolution (“independence vitality”) and a protracted and affluent future was virtually assured. Now, 3 years later, ,ost Renewable gamers misplaced -50% to -60% from their peak and are buying and selling decrease than when the struggle started and the fuel was shut off.
For me personally, I cannot make investments into these overvalued protection shares. After all they will simply go up one other 20%, 30% and even 50%, however within the mid-term, I assume they’re greater than pretty valued on a elementary foundation. And as I discussed: I’m not superb on timing these quick time period “FOMO” strikes.
There is likely to be alternatives alongside the worth chain, however in the meanwhile I’ll stick to my boring & underperforming “high quality” small caps.
