Portfolio Updates
Some moves, updates and a look ahead
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Never sell! But don’t not sell either…
It’s been a little while since I last updated you on my portfolio holdings. I’ve made some changes since then including selling one significant holding (Topicus - $TOI.V) and replacing with a new significant holding (Atlas Engineered Products - $AEP.V).
I’ll walk you through the changes in more detail below but here you can see my current holdings as they are currently weighted with the current market values.
Sells
ADBE 0.00%↑ Adobe was sold as I reflected on the Figma purchase, I realized that the competitive advantage was potentially not as strong as I initially had assessed. A shrinking moat is certainly not where I want my money invested if I am paying high multiples. This was my error in judgement. So far, Adobe seems to fundamentally continue to do well and its possible that selling will turn out to be a mistake but I need to be honest with myself and admit my original thesis was not quite right.
AZO 0.00%↑ Autozone is a good business fundamentally but much of the investment relies on being able to continue buybacks at attractive rates of return on that incremental capital investment. Given the valuation multiples are at the higher end of the historic ranges, this incremental return from buybacks may be somewhat muted going forward. In today’s market, there are simply better opportunities, in my opinion. If the price got cheap again, I would consider buying again.
DPZ 0.00%↑ Domino’s has struggled fundamentally for now. The price got to a place that had perfection baked in. Unfortunately, this occurred just as perfection was not on the menu. Luckily I was able to get out of Domino’s before it fell too far. This is one I will keep an eye on and if the value looks attractive and the business recovers, I would consider owning again.
$TOI.V Topicus, the baby Constellation Software focused on Europe. I sold Topicus as I felt that I didn’t need the extra specific exposure given the amount of Constellation Software I own, in turn having reasonable exposure to Topicus (as Constellation has a big stake in Topicus). If the price on Topicus got cheap due to temporary pain in Europe or some other temporary reason, I would consider owing it again.
Buys
$TBTC TableTrac is a microcap with a founder led operation that has been growing steadily, enjoys some tailwinds and has a very palatable valuation. I wrote about TBTC here: TableTrac: A microcap with a founder led team with laser focus.
$AEP.V Atlas Engineered Products is a microcap that is growing and has low valuation. They are serial acquirers and operators in the wood products space supporting the residential building industry, mainly in Canada so far. I wrote about them here: Atlas Engineered Products - $AEP.V.
BN 0.00%↑ and BAM 0.00%↑ Brookfield Corp and its recently spun asset manager has been and interesting "in plain sight" opportunity. Partly, its a bet ont he jockey and the team and the long term culture they have grown over the years. I also believe that the stock has been beaten up to some extent partly due to temporary pressure on anything related to financials, interest rates, commercial real estate. I wrote a longform tweet on Bruce Flatt and Brookfield if interested in more of my specific thoughts on it.
Adds
$OTCM I added to OTC Markets. They’ve been doing smart acquisitions this past year and I wanted more exposure for the long term. I originally wrote about OTCM when I first purchased them. OTC Markets: Routing for the little guy.
In Other News:
I had the pleasure of discussing POOL 0.00%↑ Poolcorp with the guys on Chit Chat Money Check out the podcast episode here: Chit Chat Money - Poolcorp Discussion
I’m currently working on a writeup that is rather unusual for me. It’s going to be about an interesting deep value turnaround situation about TUP 0.00%↑ Tupperware Brands. Look for it within a week or so.
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