Bought MBB

I added another and hopefully anotherone of the better SOTP plays.

This is not investment advice. Please read the disclaimer. I might own discussed stock(s) currently or at a later time. I might transact in any securities at any time.

MBB SE is a German industrial holding company, based in Berlin with high insider ownership and a history of value creation. Currently trading at around 70% of NAV, depending on ones value assumption for privately held businesses one can assume to realize better than ‘fair‘ returns over the long run.

Capable and honest management is crucial for SOTP plays to work out. MBB’s management has historically created value through buying, improving and spinning German mid-sized corporations. The spinning or selling off assets and realizing value is crucial, as it signals (potentially) good capital allocation skills and not just asset gathering. Taking about capital allocation: the company is currently buying back shares, and portfolio companies are buying their own shares as well. Current prices should be seen as good entry points in a few years I believe.

I think the recently started to show within their SOTP chart value for the holding which I do not liek too much. While I believe the do create value (see above) I do not like them to show it here. Quite the different view should be applied I believe: overhead costs can be capitalized at some multiple and shown/thought of witin todays value wtihin the SOTP. such an approach could also explain why many holdings trade at a discount to NAV/SOTP value calculated. To clarify, i do believe the management/hold co will create value.

Jan 2023 presentation.

Feb 24, 2023 I bought a 2% position at €76.90 at about 70% of calculated NAV.

Advertisement