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

Shurgard Self Storage is the largest owner and operator of self-storage facilities in Europe, offering leasing of storage spaces for individuals and businesses, along with related services like packing materials and insurance referrals. The company primarily operates in urban areas across seven European countries: the Netherlands, France, Sweden, the United Kingdom, Belgium, Germany, and Denmark. Shurgard Self Storage commenced operations in 1995 and is headquartered in Zellik, Belgium.

<ul><li>Shurgard Self Storage was founded 1979 in the US, as one of the world’s first self-storage chains.</li><li>They were acquired by Public Storage in 2006 who sold just over half the European arm to the New York Common Retirement Fund.</li><li>The company IPOed in Brussles in October 2018 (EBR:SHUR) and has a €2.23b market cap today.</li></ul>

Shurgard Self Storage was founded 1979 in the US, as one of the world’s first self-storage chains.They were acquired by Public Storage in 2006 who sold just over half the European arm to the New York Common Retirement Fund.The company IPOed in Brussles in October 2018 (EBR:SHUR) and has a €2.23b market cap today.

Shurgard: Over-Followed, But Misunderstood

S4 Capital is a digital advertising, marketing, and technology services company. It builds a purely digital advertising and marketing services business for global, multinational, regional, and local clients, focusing on content, data & digital media, and technology services. The company was established in May 2018 and is headquartered in London, United Kingdom.

<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, operating as Vivo, is the largest wireless carrier in Brazil. The company offers a wide range of telecommunications and digital services, including mobile and fixed-line voice, broadband internet access (3G, 4G, 4.5G, and 5G), pay-TV services, and various digital services like entertainment, cloud, security, and financial services. It also provides IT support and sells devices and accessories. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.

<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><p>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.</p></li><li><p>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. </p></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. 