Monthly Portfolio Update - October 2024 + Key Movements

Portfolio performance enhancement amid strong volatility

Hello fellow investor,

In this section, I present a transparent monthly update of my portfolio. It adheres to my investment strategy, which you can find here. Additionally, I have detailed my approach to Total Shareholder Return (TSR) in this article.

This presentation is divided into several parts:

• Global view of the portfolio’s valuation and metrics

• For dividend enthusiasts, a presentation of the Projected Annual Dividend Income (PADI) and a monthly calendar

• Sector and geographical breakdown

For paid subscribers, there is also:

• An explanation of the month's movements

• A review of the month's news

• A presentation of current portfolios (small-cap and large-cap)

• My reinforcement price for potential stock purchases

• My fair price estimation

• And, of course, access to all my content, including stock deep dives, industry analyses, screeners and scoring, and real-time updates on my buy/sell movements

Please note that my portfolio is denominated in euros, making it subject to exchange rate fluctuations, particularly the euro-dollar exchange rate.

Overall performance

This month's performance was disappointing. The contrast between the results of my small-cap portfolio and the underperformance of my large-cap portfolio reinforces the need for further optimization, cutting the weeds and watering the flowers. In line with this strategy, I sold five stocks to free up more cash (and I have to admit, the timing was incredibly bad).

I plan to use this cash to strengthen positions in stocks with the best outlooks and potential Total Shareholder Return (TSR). Additionally, I may consider adding one or two high-growth stocks from the quality universe to the portfolio.

A new guideline to maintain a balanced portfolio is to limit holdings to 15 to 20 stocks per portfolio.

The small-cap portfolio also experienced a period of consolidation. This can largely be attributed to many of the stocks entering a consolidation phase from a technical analysis perspective after a good rally. This is a positive development, as it provides an opportunity to strengthen my key positions and reinforce my core convictions.

Valuation and metrics

This month I added 1k€ in my small-cap portfolio.

My portfolio’s key metrics significantly improved with the stocks I sold:

• Past growth: 15.6% —> 17.3% / Estimated future growth: 11.2% —> 12.1%

• Net profit margin: 26.4% —> 28.8%

• ROE: 40.5% —> 42.6% / ROIC: 24.8% —> 26.4%

• Debt leverage: -0.28x —> -0.39x EBITDA (so average net cash position)

• PE: 29.2x —> 29.1x / PE Y+2: 21.4x —> 21.0x

• FCF yield: 4.08—> 4.06% / FCF yield Y+2: 5.64% —> 5.75%

• Dividend yield: 1.33% —> 1.29%

• Dividend growth: 9.9% —> 9.9%

• Buybacks: 0.72% —> 0.77%

• Expected TSR: 12.6% —> 13.1%

Focusing solely on my small-cap portfolio, here are the key metrics (weighted average):

• Past growth: 23.2% / Estimated future growth: 16.7%

• Net profit margin: 22.7%

• ROE: 39.6% / ROIC: 30.1%

• Debt leverage: -0.7x EBITDA (so average net cash position)

• PE: 23.1x / PE Y+2: 16.5x

• FCF yield: 5.4% / FCF yield Y+2: 8.8%

• Dividend yield: 2.2%

• Dividend growth: 11.8%

• Dilution: -0.1%

• Expected TSR: 17.4%

PADI saw a significant decline following the sale of the stocks I previously mentioned.

Published articles in July

• Stock deep dives

  • Schneider Electric

  • BoneSupport

  • Salesforce

• Industry analysis

  • Supply Chain software

• Screeners

  • 8 companies poised to triple their revenue by 2030

• One Pagers

  • Week 36

  • Week 37

  • Week 38

  • Week 39

• Stock Duels

  • Fortinet vs Palo Alto

  • Dassault Systemes vs PTC

• Stock market news and culture

  • Business cycles, the big picture

  • The rise of the silver economy

  • Emerging luxury trends

  • Shifts in cloud market share

• Stock picking

  • Stocks sold + 1 new buy

And now it is time to discover the 2 portfolios (stocks and news).