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

Thematic (Sector/Industry)

<ul>
<li>Value investing is often described as running towards the fire or seeking out disaster.</li>
<li>Often, outstanding returns can be had as the market reverts from total capitulation, to merely bad.</li>
<li>In the case of Brazil today, an investor is paying capitulation pricing for prospects that are already better than merely bad.</li>
</ul>


Value investing is often described as running towards the fire or seeking out disaster.
Often, outstanding returns can be had as the market reverts from total capitulation, to merely bad.
In the case of Brazil today, an investor is paying capitulation pricing for prospects that are already better than merely bad.


Equity Bottom-Up

Cia Brasileira de Distribuicao / Equity Bottom-Up

Cia Brasileira de Distribuicao operates in the food and non-food retail businesses. The Group's structure comprises of supermarkets, hypermarkets, electronics/household appliance stores, convenience stores, cash & carry (wholesale/retail), e-commerce operations and a wide distribution network.

<ul><li>I recently made my first purchase for the year, buying a core position in Brazilian holdco Companhia Brasileira de Distribuição (CBD:NYSE).</li><li>I believe it has merely been caught up in the general market/SIVB sell-off and the price being offered is too good to pass up.</li><li>CBD is engaged in supermarket/retailing operations and is controlled by the French giant Casino, with 41% ownership.</li></ul>

I recently made my first purchase for the year, buying a core position in Brazilian holdco Companhia Brasileira de Distribuição (CBD:NYSE).I believe it has merely been caught up in the general market/SIVB sell-off and the price being offered is too good to pass up.CBD is engaged in supermarket/retailing operations and is controlled by the French giant Casino, with 41% ownership.

CBD - When The Catalyst Is Slapping You in the Face

<ul><li>Just a short pre-Christmas note today. A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.</li><li>Yes, those were bubbles of the more ridiculous variety, but the S&amp;P 500 is still dangerously expensive and growth stocks are not the sole reason.</li><li>Under the hood, the index is stuffed with mature industrial and consumer businesses still trading well above their historical norms.</li></ul>

Just a short pre-Christmas note today. A number of market pundits have been giving the all clear to jump back in the pool now that crypto has been nuked and Peleton et al are down 80%+.Yes, those were bubbles of the more ridiculous variety, but the S&amp;P 500 is still dangerously expensive and growth stocks are not the sole reason.Under the hood, the index is stuffed with mature industrial and consumer businesses still trading well above their historical norms.

Petrobras Distribuidora SA / Equity Bottom-Up

Petrobras Distribuidora S.A. distributes petroleum products. The Company provides petroleum products such as gasoline, diesel, ethanol, and lubricants, as well as operates a chain of convience-stores. Petrobras Distribuidora serves customers in Brazil.

<ul><li>I had to write a brief note about the panic whipped up by UBS’ downgrade of Petrobras, cutting its price target from R$47 to R$22 on fears of a policy shift under the incoming Lula administration.</li><li>This combined with quarterly ex-dividend day, to send the shares sharply lower and extend their slide since the election.</li><li>This Reuters article sums up recent events nicely- namely Lula is over-hauling PBR management and seeking a strategic shift from monster dividend pay-outs, towards increased investment in renewables and possible domestic price caps.</li></ul>

I had to write a brief note about the panic whipped up by UBS’ downgrade of Petrobras, cutting its price target from R$47 to R$22 on fears of a policy shift under the incoming Lula administration.This combined with quarterly ex-dividend day, to send the shares sharply lower and extend their slide since the election.This Reuters article sums up recent events nicely- namely Lula is over-hauling PBR management and seeking a strategic shift from monster dividend pay-outs, towards increased investment in renewables and possible domestic price caps.

Petrobras: Pricing Amargeddon, With a Muddle Through Likely

Liberty Latin America  / Equity Bottom-Up

Liberty Latin America Ltd. operates as a telecommunication company. The Company offers video, broadband Internet, telephony, and mobile services. Liberty Latin America also delivers entertainment services. Liberty Latin America serves customers in Chile, Puerto Rico, the Caribbean, and Latin America.

<div data-attrs='{"url":"https://superfluousvalue.substack.com/subscribe?","text":"Subscribe"}'><div><form class="subscription-widget-subscribe"><ul><li><span style="font-size: var(--content-font-size);">LILAK has become a tragic joke among investors. During its 6-year public life, the share-price has tanked over 80% and all the way down, the faithful have been pitching it with bullet points like “Malone vehicle” and “leveraged buy-backs”.</span></li><li>While some of this was self-inflicted (the spin price was too high and the company overpaid for C&amp;W in a sweetheart deal), much of the pain was outside management’s control and only cyclical in nature.</li><li>Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their feet.</li></ul></form></div></div>

LILAK has become a tragic joke among investors. During its 6-year public life, the share-price has tanked over 80% and all the way down, the faithful have been pitching it with bullet points like “Malone vehicle” and “leveraged buy-backs”.While some of this was self-inflicted (the spin price was too high and the company overpaid for C&amp;W in a sweetheart deal), much of the pain was outside management’s control and only cyclical in nature.Hurricane Maria destroying Puerto Rico, Covid 19 and relentless weakening in Emerging Market currencies and sentiment can hardly be laid at their feet.