One after the other, houses that have built their reputation on the small and medium-sized values go to the conquest of the great. End of December, Sycomore Asset Management has thus launched Sycamore LargeCap, a mutual fund operated by Thomas Dhainaut. "In 2001, when the company was founded, the small and midcaps was the investment universe which offered the most potential, recalled." The Sycamore managers had therefore sought opportunities on the second market and the free market for ignored nuggets of financial analysts. Meanwhile, market conditions have changed. In early 2005, the large cap were strongly sous-valorisées, which led the team to come back on this pan of the rating. If the size of capitalization changes, our approach remains the same.
The objective of Thomas Dhainaut is to find companies whose course is significantly less than what he considers their intrinsic value. To identify them, he begins by applying quantitative filters to isolate both values of growth values of assets, performance and turnaround. In a second time, he analyzes the fundamentals of these companies, evaluates their haircut and search several catalysts for rehabilitation. "The major difference with the work on the smaller values is that I attach more importance to the momentum and the recommendations of financial analysts. "But this feature is explained above all by the fact that large values are more sensitive to changes in market sentiment," justifies the Manager.
On this basis, he constructed a concentrated portfolio composed of 30 lines. All are chosen on a case by case, without sectoral, geographical constraints or style. Thomas Dhainaut is thus interested in values for which the interest is is blunt, the image of Continental. "Between 2002 and 2004, the title has been closely followed because the market was on the lookout for restructurings." Now that the balance has been cleaned up, it has not lost its appeal. "The group displays high growth rates in braking systems, in particular in the United States, where the penetration rate is still low," he argued. The Manager also distinguishes Vivendi Universal, finding that the ability to increase the dividend is clearly underestimated.
It also looks controversial as Banco Santander files. "The market doubt of his ability to gain market share in Latin America and to integrate Abbey National, finds." The Spanish group relies on one of the best platforms for customer management, which will enable it to identify important synergies with its subsidiary English. "Similarly, it takes the market reverse on Deutsche Post, believing that valorization reflects potential growth close to zero when the turnover increased by 5.
But Thomas Dhainaut also turned to more consensual titles such as ENI or E.ON. "The market is fairly confident on these two issues." ENI, an adjustment is possible where the assumptions of financial analysts rely on a far less than the current oil prices. In the case of E.ON, the market is betting on statutory German that will impact the life of nuclear power plants. Yet these companies can enforce other catalysts, such as their ability to increase the return to shareholders. ENI should identify significant surplus of cash with the sale of its stake in Snam Rete Gas. "Meanwhile, E.ON should ensure an outstanding return of 6 with the split of Degussa, in addition to the current 3.3 ", it sales.
Always on a case by case, the Manager of Sycamore selects BNP Paribas. Despite a beautiful route since may, the Bank seems still unfairly sous-valorisée. The title has a haircut of 20 peers despite a higher profitability of 10, a more significant growth potential and its many diverse activities.
Decidedly opportunistic, he took advantage of Deutsche Telekom or Arcelor withdrawal movements. This has certainly suffered déstockages in recent months. But the penalty seemed excessive because the group covers the cost of his capital down cycle and he seems capable of resisting these transient pressures.
Similarly, the hesitations on Renault give an opportunity to strengthen on the constructor. "For the moment, the market expected the speech of Carlos Ghosn, which should take place either at the motor show, or at the latest at the time of the presentation of the annual results, assume it." On this occasion, it might as well mention the strengthening of synergies with Nissan as its development objectives in emerging countries. A broadening of the range, or even the creation of a luxury brand, is not excluded. His intervention in all will end cases to these questions and will give the kick-off of the adjustment of the title.