Research from Superfluous Value, Superfluous Value

Superfluous Value

Research from Superfluous Value

Stock selection has rarely been as important as it is today. After a roaring decade for US markets and with signs of mania everywhere, the S&P 500 as over-priced as it has ever been.

But, there is better way. Superfluous Value is a contrarian, deep-dive into the markets forgotten by the 60/40 instos and indexing, momentum chasers. Where the hot money has long moved on, it leaves behind investments offering great safety and prospective returns.

I believe the 2020s will look diametrically opposite to the recent past, with Emerging Markets, the UK, Japan and commodities set to rip and I intend to be holding the best opportunities available as they do.

Please feel free to come along on the journey.

Contrarian Deep-Dive into the Markets

Equity Bottom-Up

S4 Capital PLC operates as a media company. The Company provides digital advertising and marketing services. S4 Capital serves customers worldwide.

<ul><li>It was the sort of year that may only come once in a career.</li><li>Almost everything worked as the markets finally looked beyond US tech to Asian holdcos, commodities and EM value.</li><li>The level of outperformance was particularly surprising given the AI bubble and crypto/meme silliness rage on and that I began the year with 24% cash.</li></ul>

It was the sort of year that may only come once in a career.Almost everything worked as the markets finally looked beyond US tech to Asian holdcos, commodities and EM value.The level of outperformance was particularly surprising given the AI bubble and crypto/meme silliness rage on and that I began the year with 24% cash.

Telefonica Brasil, S.A. is a telecommunications company which provides services for fixed and mobile telephony, data transmission and VAS, pay TV, among others. The Company is part of the Telefonica Group, a communication conglomerate with presence in multiple countries.

<ul><li>Long-term readers will know I have held Telefonica Brasil (Vivo) for four years and been loudly bullish on the company at times.</li><li>But the thesis hasn’t played out as hoped and the time has come to make way for better opportunities.</li><li>It’s the good type of mistake, where you scrape away with a modest gain (20% + some nice dividends), but an analytical error all the same.</li></ul>

Long-term readers will know I have held Telefonica Brasil (Vivo) for four years and been loudly bullish on the company at times.But the thesis hasn’t played out as hoped and the time has come to make way for better opportunities.It’s the good type of mistake, where you scrape away with a modest gain (20% + some nice dividends), but an analytical error all the same.

Thematic (Sector/Industry)

<ul><li>The UK remains one of my favourite hunting grounds and I’ve written about its challenges ad nauseam over the last few years.</li><li>But today, it’s particularly worth pointing out that an unusually large number of UK stocks are down significantly over the last month.</li><li>Many are for business specific reasons, but it’s almost uncanny the way UK stocks find a way to tank, even when much of the world is rallying.</li></ul>

The UK remains one of my favourite hunting grounds and I’ve written about its challenges ad nauseam over the last few years.But today, it’s particularly worth pointing out that an unusually large number of UK stocks are down significantly over the last month.Many are for business specific reasons, but it’s almost uncanny the way UK stocks find a way to tank, even when much of the world is rallying.

<ul><li>Rules are made to be broken. While I have generally followed a practice of backing away slowly from any company mentioning AI or TAM in recent times, this week I bought shares in a “tech-led, new age/new era digital advertising, marketing and technology services company” at a highly depressed valuation.</li><li>While the tech sector and its tie-ins haven’t been the place to find value lately, S4 Capital has declined to an attractive price through a combination of industry cyclicality, operational mis-steps and a UK listing.</li><li>The stock is down an astonishing 95% from its heady, post-covid days to the point of trading for less than a quarter of the capital invested since its founding. </li></ul>

Rules are made to be broken. While I have generally followed a practice of backing away slowly from any company mentioning AI or TAM in recent times, this week I bought shares in a “tech-led, new age/new era digital advertising, marketing and technology services company” at a highly depressed valuation.While the tech sector and its tie-ins haven’t been the place to find value lately, S4 Capital has declined to an attractive price through a combination of industry cyclicality, operational mis-steps and a UK listing.The stock is down an astonishing 95% from its heady, post-covid days to the point of trading for less than a quarter of the capital invested since its founding. 

Mandarin Oriental International / Equity Bottom-Up

Mandarin Oriental International Limited is a multinational hospitality and management group that owns and operates luxury hotels, resorts, and residences across Asia, Europe, the Middle East, Africa, and the Americas. The company also engages in hotel and residences branding, management, and property development activities, offering luxury accommodations, fine dining, and wellness facilities. It was founded in 1963 and is headquartered in Hong Kong.

Mandarin Oriental International (MAND SP)

<ul><li>Mandarin owns the One Causeway Bay precinct which is likely worth more than the company’s current Enterprise Value ($2.4b) having recieved an offer of $3.8b for the site in 2017.</li><li>For those unfamiliar, this site is being massively re-developed into retail and office- not a hotel as might be expected given the company.</li><li>Mandarin is transitioning to a capital light hotel management model by selling its owned hotels and maintaining management contracts with the purchasers.</li></ul>

Mandarin owns the One Causeway Bay precinct which is likely worth more than the company’s current Enterprise Value ($2.4b) having recieved an offer of $3.8b for the site in 2017.For those unfamiliar, this site is being massively re-developed into retail and office- not a hotel as might be expected given the company.Mandarin is transitioning to a capital light hotel management model by selling its owned hotels and maintaining management contracts with the purchasers.

Superfluous Value
Contrarian Deep-Dive into the Markets

2025 Portfolio Review

The level of outperformance was particularly surprising given the AI bubble and crypto/meme silliness rage on and that I began the year with 24% cash.

Superfluous Value

Telefonica Brasil: Moving On

Long-term readers will know I have held Telefonica Brasil (Vivo) for four years and been loudly bullish on the company at times.

Superfluous Value

Noteworthy UK Carnage

The UK remains one of my favourite hunting grounds and I’ve written about its challenges ad nauseam over the last few years.

Superfluous Value

S4 Capital: When Knights Cry

The stock is down an astonishing 95% from its heady, post-covid days to the point of trading for less than a quarter of the capital invested since...

Superfluous Value

Mandarin Oriental: Don't Lose Money

Mandarin owns the One Causeway Bay precinct which is likely worth more than the company’s current Enterprise Value ($2.4b) having recieved an offer...

Superfluous Value