2016 Review

Well 2016 is not finished yet but I do have some free time now.
My portfolio is up 22% vs 15% in 2015 (11% in 2014 and 35 % in 2013) (internal rate of return, including dividends and broker fees).

Benchmarks:
- the mid&small caps index (MS190) is up ~6 %
- my favorite investment funds with the same universe (value, small caps)
- Amiral Gestion Sextant PEA up ~19 %
- HMG Decouvertes up ~20 %
- Moneta micro entreprises up ~11%
- Independance et expansion up ~27%. Noteworthy : the fund may be closed to new subscriptions next year to limit its size.

A good performance, mainly linked to my investment universe rather than my stock picking skills I fear. The downside is that I find fewer and fewer investment ideas.

My biggest positions end 2016 are very close to my largest end 2015 lines:
Tessi. The founding family sold its majority stake mid 2015 at 132 €/share to the Dentressangle family.  A tender offer will be made at the same price early 2016. The stock is currently around 150€ and valuation is still reasonable. I don't intend to sell my shares.

Precia. Makes industrial scales and associated services (calibration...). The business is slowly expanding its operations and making small acquisitions.Still reasonably valued.


Installux (recently discussed here on a Swedish blog)

Gerard Perrier (industrial automation, nuclear sector, should benefit from EDF "Grand carenage" program = major maintenance and upgrade of power plants to extend their lifetime).

Gevelot (auto parts, pumps). Flat this year, suffers from downturn in oil sector. Very cheap (around 3x EBIT) but management seems firmly decided NOT to return excess cash to shareholders.

Tops
SII. Up 74% this year after 70% in 2015. Textbook revaluation (from low earnings/low multiple to higher earnings/higher multiple, Mr Market loves growth).
DLSI (interim staffing, comparable to Group Crit but smaller company). Up 80% this year, economic situation slowly improving and construction/building sector in better shape, benefits also from tax rebate for low salaries (CICE).

Flops
ITS Group (IT services). To make a long story short, I was assuming that after a major acquisition in 2013 profitability would be restored at the level of comparable companies. Apparently takes much longer than I anticipated based on management announcements.

Rallye group (holding company of supermarket chain Casino, operating in France and Latin America). I was lured by the juicy dividend, got hammered after Muddy waters shorted the stock (link). Too complex for me to be really sure of myself, sold some at a loss to reduce psychological stress to manageable level. Not so convinced about Muddy waters thesis though.

Best wishes and hope to write more next year.