Fidecum Contrarian Value Euroland fund

Company analysis

The stock selection in the Fidecum Contrarian Value emerges from the evaluation of sustainable company data in “Euroland”: single stocks are selected consequently using our model, rather than on the basis of regional or sector allocation.

Looking at the substantial value the current market capitalization will be compared with the book value. When having a market capitalization close to the book value the following data will be added to the analysis: additional high hidden reserves, non-tangible assets. The capitalized earnings value concentrates on the mid-cycle-returns of a company. The maximum of either the capitalized earnings of the sum of the parts equal the intrinsic value of the company.

A central part of our analysis is the idea of theoretically buying the entire company: would an investor consider it to be advantageous to buy the entire company at the current market capitalization when it is trading at a steep discount to its theoretical value based on our calculation? If the market capitalization is significantly below the theoretically calculated value the shares will qualify for an investment – almost similar to a private equity valuation approach.

The model does not allow for stop-loss selling. Quite the contrary, declining share prices are used to top up positions. This is an anti-cyclical investment strategy aims at long term capital appreciation. One positive side effect of this approach is the very low inventory turnover and thus relative low transaction costs.

Fidecum – die Fondsmanufaktur®