After spending our days searching for something to buy, without success, we ended up finding something to sell.<\/p>\n
For a patrimonial fund like Monocle, it is useful to have some short positions that will serve as a safety net in case of an accident. To avoid paying too much for these protections, one must find overvalued stocks that have been somewhat overlooked by a market distracted by the high-end products.<\/p>\n
Here's one such stock: Hugo Boss. The share price of this German jacket manufacturer is at \u20ac60, the same level as before COVID. In terms of performance, after a slump in 2020, Boss achieved good results in 2021 and 2022. However, these positive results were driven by the unique context of the post-pandemic recovery: an influx of customers who hadn't been able to make purchases for several months and therefore had fuller pockets.<\/p>\n
It won't be the same in 2023: pockets are now empty, and inflation adds an additional brake. Studies predict a significantly more cautious consumer in 2023, even in the luxury segment. Moreover, Hugo Boss primarily sells jackets, and one could say, \"Das veste\": you can run over them with your car, and your jacket will remain intact. So, I would be surprised if someone who stocked up on their products a few months ago has an urgent need to renew their purchases.<\/p>\n
The problem is that Hugo Boss starts this difficult year, 2023, with very high inventory levels. These stocks represent 27% of sales, compared to 22% before the pandemic. We have seen the same issue with other companies like Nike and Target. The solution is to offer discounts to reduce the inventory. By doing so, the revenue is maintained, but the profit margins are halved. Typically, in response to this, the market also reduces the valuation multiples. This leads us to a target price of \u20ac24 for Boss. Yesterday, we bought Put options with a strike price of 40, expiring in December 2023. They will be worth \u20ac16 if the stock ends at \u20ac24. We paid \u20ac0.80 for them. This translates to a 20X return, representing a profit of +1% for the fund. I really like this multiple.<\/p>","protected":false},"excerpt":{"rendered":"
A force de passer nos journ\u00e9es \u00e0 chercher quelque chose \u00e0 acheter, sans succ\u00e8s, nous avons fini par trouver quelque chose \u00e0 vendre. Pour un fonds patrimonial comme…<\/p>","protected":false},"author":8,"featured_media":3954,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3953","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-le-billet-de-monocle"],"acf":[],"yoast_head":"\n