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Newsletter

Only use it when Strategies are back Due to popular demand I have removed the company description in the portfolio tables at the end of the newsletter and replaced it with the screener strategy I used to select the company. Do you know all the order types? I am sure, especially if you use an internet based stock broker, you have seen or used some of the different types of orders you can choose from. But do you know what they all mean? And do you know that they can also increase your returns by giving you a lower purchase and a higher selling price? Below is a quick overview of the different order types and how you can optimally use them. Easy to understand Even though the terms may sound odd at first dont worry they are all very easy to understand once you have worked through an example.

December 2013

high compared to what is traded at the time (for example with some of the smaller companies recommended in the newsletter).

You should thus use this type of order only when you desperately want to buy or sell a security regardless of the price or if your order volume is small compared to the volume traded in the market. Gives you no control A market order gives you as the buyer or seller no control over the price but it will ensure that your order gets executed if there is enough volume to do so. I only use market orders when buying very large market value companies, where the amount of shares I want to trade is only a small fraction of the daily volume. Low cost as easy to execute In terms of brokerage costs market orders are the most inexpensive type of orders you can place because your broker does not have to go to much trouble to get them executed.

Limit Orders Market Order This is the simplest and the quickest order to execute. When you give a market order your broker will sell or buy a stock at the current market price, whatever it may be. Depending on the market conditions, your order may not always get executed at the price you think it will. For example, if there is a lot of volume traded, you may get a price close to the last price when you give your order. Be careful Be careful though as market orders may move the stock price substantially if the volume of your order is These types of orders are as popular as market orders; however, they have a major advantage because they let you control the price at which the order is executed. As the name suggests, with a limit order, you tell your broker to buy or sell the security at a maximum or minimum price. Only be executed when The order will only be executed if the price is within the limit you have set. For example, if you set a buy limit order for 50 but the current market price of the stock is at 60, the order will not be executed unless the price drops by 10 to 50. Control your buy and sell price

2 December 2013 Vol. 4 No. 12

Newsletter
Limit orders can thus be used to control the buy and sell prices of your investment. May cost a bit more worth it Note that you may need to pay a slightly higher commission when you place a limit order. But if the volume traded in the company is low it is always worthwhile. But your order may not be executed But you must remember that with a limit order your order may not get executed is the price you set is not reached. For example you set a sell limit order at 40 and the current price of the stock is 30. If the price does not reach the limit you set or higher, your order will not be executed. Similarly a buy limit order will only be executed at the limit price or lower. Limit order variations It is also possible to further restrain buy and sell limit orders. This can be done with a FOK (Fill or Kill) and an AON (All or None) orders. Execute or cancelled When you place a FOK limit order, it will either be executed in full or cancelled (executed in full here means buy the number of shares you ordered). All or nothing On the other hand an AON limit order will only be executed in full. This means that you will either buy or sell the complete number of shares you ordered or the order will not be executed. If the order cannot be executed it will not be cancelled (as is the case with a FOK order) but will be held for later execution up to the date of the orders expiry. Use AON when

December 2013

The AON is a very good type of order to use when you are buying or selling illiquid shares (as some of the small companies the newsletter recommends). It will avoid multiple transactions of a small number of shares that can be very expensive in terms of brokerage. Not always available Unfortunately this type of order is not available from all brokers and at all stock exchanges.

Stop or Stop Loss Orders Stop orders can be placed when you are buying or selling shares. Used to limit losses They are used to either buy a share or sell if a certain price is exceeded. They are however mainly used to limit your losses by protecting you from a big drop in the price of a stock. With a stop loss order, you tell your broker to sell a share if it falls below a certain price. Below the market price Stop loss orders are generally set below the current market price. Which means if the price later falls to this price, the broker will execute your stop loss order. For example you own a share, currently trading at 40 per share and want to limit your losses by selling it if the price falls to 30. You would then place a stop loss order at 30. This means as soon as the share price falls to 30 your broker will automatically sell the share. Important - Becomes a market order Its important for you to keep in mind that when triggered your stop loss order becomes a market order and it will be executed at the current market price. For example when you use a sell stop loss order, you are instructing your broker to sell the security at the best available price when the stop price has been reached (see Market Orders above).

2 December 2013 Vol. 4 No. 12

Newsletter
If the price of a stock stays above the stop price you set the stop loss order will not be executed. Alternatively, you can also use the buy stop order (below the current market price) to take advantage of a declining market so you can buy a stock once a certain lower price has been reached. Stop limit order This type of order combines the features of a limit as well as a stop order. When stop is reached limit order triggered Once the stop price is reached; instead of a market order (like in case of normal stop orders), the stop limit order turns into a limit order. This means that the security is bought or sold at no more or less than your specified limit price. This type of order is a good choice when placing stop loss orders for illiquid shares. But may not be executed Be careful if you want to use this type of order to limit losses, because if the stock price has fallen enough to exceed your stop price it may also have fallen past your limit price. This means your stop limit order will not be executed.

December 2013

you specified, the trailing stop order will become a market order (see market order above) and will be executed. On the other hand, if the price continues to rise the trailing order will follow it and allow you to participate in further gains. Trailing stop limit order This type of an order combines the features of both the trailing order and the limit order. Instead of becoming a market order when triggered a trailing stop limit order becomes a limit order (see limit order above).

Day order You would use this type of order if you want to only have your order to be valid for one day. Your order will thus be cancelled when the market closes.

Good Till-Cancelled-Order (GTC) This type of an order can theoretically be in force indefinitely; however your broker may set a limit on such orders for example 90 days. As the name suggests, these orders are in effect until you cancel it.

Trailing Orders or Trailing Stop Orders Like the name suggest, a trailing order is essentially a stop order where the stop price is not fixed.

Immediate-or-cancel order (IOC) Stop price a percentage change A trailing stop order is thus similar to the regular stop orders but the stop price which is set as a percentage change from the price of a security. This means if the price of a share were to fall by 10%, the order will be triggered. A trailing stop order can thus be very effectively used to protect your profits. If you have a profit on a position you can use the trailing order to follow the price of the security. If the market value of the stock declines by a percentage This type of order is either executed immediately or cancelled. However, unlike fill or kill orders an IOC order can be partially executed.

Market on Close and Market on Open (MOC & MOO) These types of orders will ensure that you get the open or close price (or close to it) respectively on the day for which you place the order.

2 December 2013 Vol. 4 No. 12

Newsletter
Europe Sell two One cancels the other order (OCO) This type of order is used if you have two orders in the market but you only want one of them to be executed. The execution of the one order will automatically cancel the other order. Here is an example. If you are invested in Microsoft at $20 a typical OCO order would be a stop loss order at $15 and a sell limit order to take a profit at $27. If one of the orders is executed, the other is automatically cancelled.

December 2013

Sell Creston (+24.1%) and Picanol (+26.0%) both recommended a year as they are not in the investment model. North America Hold two Continue to hold Gamestop (+84.2%) and Harris Corporation (+37.6%) as they are also both still in the investment model.

Year to date performance European portfolio year to date +48.5% In spite of the European markets also increasing nicely (STOXX Europe 600 Index is up 16.6%) the European portfolio has done very well and is up 48.5% (excluding dividends) so far. North American portfolio year to date +37.4% The North American portfolio is also doing well and is up 37.4% so far this year (S&P 500 up 26.6%).

As you can see that are a lot of order types what give you quite a lot of opportunities to limit losses, lock in gains and give you a better buy or sell price. The first step you should take is to look at what order types your broker offers and how they are defined. This is important as the exact nature of an order may differ slightly from broker to broker. Once you have learned what is available start using them to your advantage.

Wishing you profitable investing

Now for this month's recommendations. This month's ideas In Europe I am recommending two French based companies. The one is engaged in the perfume and cosmetics business and the other provides software, computer aided design (CAD)/computer aided manufacturing (CAM) equipment. In North America I have found a diversified manufacturer of engineered industrial products and a Canada-based company that provides pipeline and facility construction and maintenance services to oil and gas companies.

Portfolio changes Portfolio changes this month:

2 December 2013 Vol. 4 No. 12

Interparfums SA Europe
At the end of 2012, the company employed 205 people across its offices in France, Europe, North America and Asia. Valuation Metrics
Source: Reuters EBIT/Assets EBIT/EV Dividend Yield (TTM*) Price to Earnings (TTM*) EV to Free Cash Flow Price to Book Price to Sales *TTM = Trailing 12 months 78.2% 41.1% 1.56% 4.9 3.5 2.1 1.6

Executive Summary
Recommendation Buy Recent Price (Closing price on 29.12.2013 31.47 Paris Stock Exchange) Security No. (ISIN) FR0004024222 Reporting Currency Euro Market Capitalisation 761.6 million Company Location France Main Exchange Paris Shares outstanding 24.2 million Average daily volume (last 10 days) 19 280 52 week range 19.91 to 32.00 Insider ownership 34% Fiscal year end December Suggested portfolio weighting 2% Disclosure I have a position Source: Financial Times, www.4-traders.com and company website

Source: Annual report, Financial Times, Reuters and company website.

Recent results In the third quarter (Q3) like-for-like sales increased 33.5% to 74.2 million in the third quarter of 2013 compared to 55.6 million during the same period in 2012. The increase was driven by strong growth of Montblanc (+48%) and Jimmy Choo (+47%) fragrances and successful launches of Repetto fragrance and Boucheron Place Vendme eau de perfume. Including Burberry brand sales, however, this was a decline of 37.6% compared to 118.9 million in the third quarter of 2012. For the first nine months of 2013, like-for-like sales increased 20.1% to 193.8 million from 161.3 million the previous year. For the half year to June 2013 (no profits reported in Q3) operating profits increased 87% to 54.7m, net profit before tax was up 94% and earnings per share up 70% due to the higher sales mentioned above and lower advertising expenses. Numbers include Burberry sales up to March 2013; profits excluding Burberry were not given. Outlook - 2013 Due to the expansion of its brand portfolio, especially Montblanc and Jimmy Choo; management expects total 2013 sales to reach 340 to 345 million (2012: 445 million). Summary and Conclusion Interparfums is an undervalued French cosmetics company with good price momentum. Further Reading Company Website Investor Relations Annual Reports Financial Times Summary

Description Interparfums SA (Interparfums) is a French company that is engaged in the perfume and cosmetics business. The company manufactures and distributes perfumes through license agreements with brands in the ready-to-wear, high fashion, jewellery, and accessories sectors. The company for example offers products under the Balmain, Boucheron, Jimmy Choo, Karl Lagerfeld, Lanvin, Montblanc, Nickel, Paul Smith, Repetto, S.T. Dupont, and Van Cleef & Arpels brand names. Interparfums sells mainly perfumes (98.2% of 2012 sales); and sales by geographic segment for 2012 were as follows: North America 23.0% South America 8.0% Asia 16.4% Eastern Europe 8.6% Western Europe 24.4% France 7.9% Middle East 10.5% Africa 1.2%

In July 2012, British luxury brand Burberry paid Interparfums 181m to terminate its nearly 20-year partnership with the company.

2 December 2013 Vol. 4 No. 12

Lectra SA Europe
Source: Annual report, Financial Times, Reuters and company website.

Recent results Sales increased 11% to 50.8 million in the third quarter (Q3) of 2013 compared to 47.8 million during the same period the previous year. The increase was driven by growth in both new systems sales and recurring sales. Income from operations in Q3 amounted to 6.1 million, up 32% as a result of the natural drop in overhead costs over the summer vacation months. Net income was up 12% to 4.2 million in the third quarter of 2013 and earnings per share increased 15% to 0.15 per share compared to 0.13 per share, the previous year. For the first nine months of 2013, sales increased 2% to 150 million. Income from operations decreased 7% to 23.2 million and net income decreased 9.3% due to a major recruitment plan to strengthen sales and marketing. The above numbers do not include a non-recurring receipt of 11.1 million due to the end of litigation against a competitor. If it is included earnings per share increased 91% to 0.65 per share. Outlook Management said that forecasting remains difficult in the current economic climate and is cautious with regards the orders and sales from new systems for Q4. Also the increase in overhead costs resulting from the acceleration of the transformation plan and the unfavourable development of the euro/dollar exchange rate will have an impact on profits. In spite of this the company expects income from operations before non-recurring items to exceed 15 million (19.8 in 2012). Summary and Conclusion Lectra is a nicely undervalued French CAD/CAM company with good share price momentum. Further Reading Company Website Investor Relations Annual Reports Financial Times Summary

Source: Reuters

Executive Summary
Recommendation Recent Price (Closing price on 29.12.2013 Paris Stock Exchange) Security No. (ISIN) Currency Market Cap Company Location Main Exchange Shares outstanding Average daily volume (last 10 days) 52 week range Insider ownership Fiscal year end Suggested portfolio weighting Buy 7.37 FR0000065484 Euro 214.7 million France Paris 29.13 million 25 330 4.59 to 7.50 38% December 2%

Disclosure I have a position Source: Financial Times, www.4-traders.com and company website

Description Lectra SA (Lectra) is a France-based company that provides software, computer aided design (CAD) and computer aided manufacturing (CAM) equipment, and related services for industries using fabrics, leather, textiles, and composite materials. Lectra serves large corporations and medium-sized companies in the fashion, automotive, and furniture markets, as well as in the aeronautical, marine, and wind power industries. The company reports its business operations in the following geographical segments: Europe (47.3% of 2012 sales) Americas (25.3% of 2012 sales) Asia-Pacific (21.1% of 2012 sales) Other countries(6.3% of 2012 sales)

At the end of September 2013, the company had more than 1,400 employees worldwide. Valuation Metrics
EBIT/Assets EBIT/EV Dividend Yield (TTM*) Price to Earnings (TTM*) EV to Free Cash Flow Price to Book Price to Sales *TTM = Trailing 12 months 60.7% 10.0% 3.0% 9.9 17.5 3.3 1.1

2 December 2013 Vol. 4 No. 12

Handy & Harman Limited North America

Kasco Blades and Route Repair Services (Kasco) (8.7% of sales and 5.7% of operating income) Provides meat-room blade products, repair services and resale products for the meat processing industry.

Source: Reuters

At the end of December 2012, HNH employed more than 1,600 people at 33 locations in eight countries. Executive Summary
Buy $24.53 HNH US Dollar $323.5 million USA NASDAQ 13.2 million 34 450 $13.71 to $25.19 5.2% December 2%

Recommendation Recent Price (Closing price on 29.12.2013 NASDAQ) Stock Symbol Currency Market Cap Company Location Main Exchange Shares outstanding Average daily volume (last 10 days) 52 week range Insider ownership Fiscal year end Suggested portfolio weighting

Valuation Metrics
EBIT/Assets EBIT/EV Dividend Yield (TTM*) Price to Earnings (TTM*) EV Free Cash Flow Price to Book Price to Sales *TTM = Trailing 12 months Source: Annual report, Financial Times, Reuters and company website. 25.6% 11.3% 0.0% 19.3 12.3 6.2 0.5

Recent results For the nine months to September 2013 the company reported a 10.9% increase in net sales to $502.9 million driven by a strong sales growth across all of its business segments except Arlon. Operating income amounted to $45.4 million up 6.3% from the $42.7 generated during the previous year period. And net income of $29.5 million up by 34.4% from the $22.0 million achieved during the same period in 2012. Earnings per share grew 31.4% to $2.22 per share from $1.69 per share. The increase was due to higher profits from three businesses sold in 2013. Outlook Based on current results, the company expects full year 2013 sales to be in the range of $637 million to $667 million (2012: $629 million), and adjusted EBITDA to be in the range of $76 million to $82 million (2012: $74 million). Summary and Conclusion HNH is an undervalued US engineering company with good share price momentum. Further Reading Company Website Investor relations Annual Reports Financial Times Summary

Disclosure I have no position Source: Financial Times, www.4-traders.com and company website

Description Handy & Harman Ltd. (HNH) is a manufacturer of engineered industrial products in the United States and internationally. The company serves a diverse customer base from the construction, electronics, telecommunications, home appliance, transportation, utility, medical, semiconductor, aerospace, and aviation industries. HNH reports its operations under the following business segments: (Sales and operating income shown for 2012) Joining Materials (27.7% of sales and 30.5% of operating income) Tubing (15.4% of sales and 18.8% of operating income) Engineered Materials (35.4% of sales and 30.3% of operating income) Arlon Electronic Materials (Arlon) (12.8% of sales and 14.7% of operating income) Provides high performance materials for the printed circuit board (PCB) industry and silicone rubberbased insulation materials.

2 December 2013 Vol. 4 No. 12

Macro Enterprises Inc. North America


owned by North American Pipeline Inc. and North American Fleet Company Ltd. Valuation Metrics
EBIT/Assets EBIT/EV Dividend Yield (TTM*) Source: Reuters Price to Earnings (TTM*) EV to Free Cash Flow 40.2% 15.0% 0.0% 8.3 10.4 4.0 1.1

Executive Summary
Recommendation Recent Price (Closing price on 29.12.2013 TSXV) Stock Symbol Currency Market Cap Company Location Main Exchange Shares outstanding Average daily volume (last 10 days) 52 week range Insider ownership Fiscal year end Suggested portfolio weighting Disclosure Source: Financial Times, Euronext Yahoo Finance Buy CAD 6.69 MCR Canadian Dollar CAD 199.3 million Canada Toronto 29.8 million 52 190 CAD 0.76 to CAD 7.35 32% December 2% I have no position company website,

Price to Book Price to Sales *TTM = Trailing 12 months

Source: Annual report, Financial Times, Reuters and company website.

Recent results The company reported a 39.9% increase in sales to CAD 97.4 million in the first six months of 2013 compared to CAD 69.6 million during the prior year period. The increase was due to strong growth in sales from six larger facility and pipeline projects as well as maintenance and pipeline integrity work for three other customers. Pre-tax income increased 93.5% to CAD 20.7 million from CAD 10.7 million during the period, benefited from a decline in operating expenses due to improved bid margins and a higher percentage of non fixed-price work. Net income increased 96.4% to CAD 15.4 million from CAD 7.8 million, while basic earnings per share increased 90.6% to $0.61 from $0.32. Outlook The company expects sales in the third quarter to be higher than the previous year period, after taking into account the expected sales from its November 2012 acquisition. The management is also encouraged by the prospect of significant pipeline infrastructure projects in British Columbia and Alberta. Summary and Conclusion MCR is an undervalued Canadian pipeline construction and maintenance company with good share price momentum. Further Reading Company Website Investor relations Annual Reports Financial Times Summary

and

Description Macro Enterprises Inc. (MCR) is a Canada-based company that provides pipeline and facility construction and maintenance services to oil and gas companies in north eastern British Columbia and north western Alberta. The company involved in the construction, alteration, repair, and installation of pipeline and facility pressure piping and structural steel. MCR operates through three operating divisions: Macro Industries Pipeline construction, facilities construction and compressor stations; Tracer Industries Insulating, ductwork, and metal frame building construction products and services to the oil and gas installations, and Omineca Oil Services Facilities maintenance services to the oil and gas installations located in the northern British Columbia region

The company does not report operations separately and publishes its financial results as one business segment. In November 2012, MCR completed the acquisition of the pipeline construction and maintenance business

2 December 2013 Vol. 4 No. 12

Portfolio Update Europe


Buy Recommendations (sorted by recommended date)
Investment Exchange ISIN Added Buy Price Price 29.11.13
Linedata Services Paris FR0004156297 07.10.11 8.75 22.46 1.05 ERP5 best Selection + 168.7 % Europe, Magic Formula & F-Score 7 ERP5 best Selection + 233.8 % Europe, Magic Formula & F-Score 7

Dividend

Return

Strategy

Reply

Milan

IT0001499679

08.11.11

16.08

52.60

1.07

Cegedim

Paris

FR0000053506

07.06.12

23.10

20.85

0.00

- 9.7 %

Price Index 6 months sorted by ERP5

Impellam Group

London

GB00B2Q2M073

07.06.12

360.00

370.00

0.52

+ 2.9 %

Price Index 6 months sorted by MF

Viscom

Xetra

DE0007846867

02.07.12

7.75

12.27

0.60

+ 66.1 %

Price Index 6 months sorted by MF

Huntsworth

London

GB00B0CRWK29

07.08.12

44.00

69.00

4.50

+ 67.0 %

Price Index 6 months sorted by ERP5

Trinity Mirror

London

GB0009039941

09.10.12

63.50

180.00

0.00

+ 183.5 %

Price Index 6 months sorted by ERP5

Harvey Nash

London

GB0006573546

09.01.13

64.10

96.00

3.03

+ 54.5 %

Price Index 6 months sorted by ERP5 Rank

St Ives

London

GB0007689002

09.01.13

122.00

177.25

6.50

+ 50.6 %

Price Index 6 months sorted by Earnings Yield

Dart Group

London

GB00B1722W11

01.02.13

149.52

229.15

1.33

+ 54.1 %

Price Index 6 months sorted by Earnings Yield

U10

France

FR0000079147

01.02.13

2.73

3.40

0.00

+ 24.5 %

Price Index 6 months sorted by ERP5

Corticeira Amorim

Portugal

PTCOR0AE0006

28.02.13

2.07

2.30

0.10

+ 15.9 %

Price Index 6 months sorted by Earnings Yield

Axway Software

France

FR0011040500

28.03.13

14.72

23.60

0.35

+ 62.7 %

Price Index 6 months sorted by ERP5 Rank

Staffline Group

London

GB00B040L800

28.03.13

396.00

560.00

8.80

+ 43.6 %

Price Index 6 months sorted by ERP5 Rank

2 December 2013 Vol. 4 No. 12

Portfolio Update Europe


Buy Recommendations (sorted by recommended date)
Investment Exchange ISIN Added Buy Price Price 29.11.13
Advanced Digital Broadcast Switzerland CH0021194664 30.04.13 15.00 14.85 0.00 - 1.0 % Price Index 6 months sorted by ERP5 Rank

Dividend

Return

Strategy

Indesit Company

Milan

IT0000076197

30.04.13

5.97

9.18

0.20

+ 57.0 %

Price Index 6 months sorted by Earnings Yield

MGI Coutier

France

FR0000053027

30.05.13

46.00

95.00

0.50

+ 107.6 %

Price Index 6 months sorted by ERP5 & VC1

Montupet

France

FR0000037046

30.05.13

16.50

35.49

0.60

+ 118.7 %

Price Index 6 months sorted by VC1

Eniro

Stockholm

SE0000718017

28.06.13

18.45

37.25

0.00

+ 101.9 %

Price Index 6 months sorted by VC1

Fairpoint Group

London

GB0032360280

28.06.13

104.31

132.00

2.15

+ 28.6 %

Price Index 6 months sorted by EY

Kardex

Switzerland

CH0100837282

31.07.13

36.95

40.55

4.00

+ 20.6 %

Price Index 6 months sorted by EY

Societe Pour l'Informatique France Industrielle SII SA (SII)

FR0000074122

31.07.13

5.45

6.42

0.07

+ 19.1 %

Price Index 6 months sorted by ERP5

Burelle

France

FR0000061137

28.08.13

421.00

624.00

0.00

+ 48.2 %

Price Index 6 months sorted by VC1

Tesmec

Milan

IT0004585243

28.08.13

0.74

0.78

0.00

+ 6.0 %

Price Index 6 months sorted by EY

La Doria

Milan

IT0001055521

30.09.13

2.94

3.94

0.00

+ 34.1 %

Price Index 6 months sorted by VC1

Le Belier

Paris

FR0000072399

30.09.13

14.75

18.50

0.00

+ 25.4 %

Price Index 6 months sorted by VC1

Cegid Group

Paris

FR0000124703

31.10.13

21.49

23.00

0.00

+ 7.0 %

Price Index 6 months sorted by VC1

Norbert Dentressangle

Paris

FR0000052870

31.10.13

83.50

88.00

0.00

+ 5.4 %

Price Index 6 months sorted by VC1

2 December 2013 Vol. 4 No. 12

10

Portfolio Update Europe


Buy Recommendations (sorted by recommended date)
Investment Exchange ISIN Added Buy Price Price 29.11.13
Interparfums SA Paris FR0004024222 29.11.13 31.47 31.47 0.00 + 0.0 % Price Index 6 months sorted by EY

Dividend

Return

Strategy

Lectra SA

Paris

FR0000065484

29.11.13

7.37

7.37

0.00

+ 0.0 %

Price Index 6 months sorted by ERP5 Rank

Average Return

+ 53.2 %

Disclosure: I have an investment in all of the Europe Recommended Buy companies except Cegedim, Impellam, Viscom, Trinity Mirror, Harvey Nash, St. Ives, Dart Group, U10, Corticeira Amorim, Staffline Group, Advances Digital, Indesit, Montupet, Fairpoint, Kardex, SII, Tesmec and Le Belier.

2 December 2013 Vol. 4 No. 12

11

Portfolio Update Europe


Recommendations Sold (sorted by recommended date)
Investment
Exact Holdings

ISIN
NL0000350361

Added Date Price


10.07.10 18.15

Dividend per share

Sold Date Price


21.17

Return %
+ 27.8 %

Strategy

2.02 08.07.11

Magic Formula (5yr avg. EBIT) & Piotroski F-Score Piotroski (low P/B with high F-Score) Magic Formula (1yr) & Piotroski F-Score

Crown van Gelder

NL0000345452

10.07.10

7.05

08.07.11

5.39

- 23.5 %

DNX Corp (prev. DreamNex) Highlight Communications

FR0010436584

10.08.10

28.50

2.17 09.08.11

16.16

- 35.7 %

CH0006539198

10.08.10

3.85

0.17 09.08.11

3.65

Magic Formula (1&5yr - 0.8 % avg. EBIT) & Piotroski FScore - 20.9 % Magic Formula Europe & 8 Piotroski F-Score

Cegid Group

FR0000124703

10.10.10

21.58

1.05 07.10.11

16.03

Gevelot

FR0000033888

10.10.10

36.49

1.80 07.10.11

53.00

Piotroski (low P/B of + 50.2 % 29%with high F-Score of 9) - 22.2 % Magic Formula (1yr) & 8 Piotroski F-Score

Full House Resorts

US3596781092

10.11.10

3.69

08.11.11

2.87

MGI Coutier

FR000 0053027

10.12.10

31.15

0.50 30.12.99

34.31

Magic Formula & ERP5 + 11.7 % (1yr) & 8.5 Piotroski FScore + 15.1 % ERP5 best Selection & 8 Piotroski F-Score ERP5 best Selection & 7 Piotroski F-Score ERP5 best Selection & 7 Piotroski F-Score ERP5 best Selection & 8,5 Piotroski F-Score

Tessi SA

FR0004529147

10.01.11

62.87

2.00 09.01.12

70.39

GFI Informatique SA

FR0004038099

10.02.11

3.42

0.22 09.02.12

2.81

- 11.4 %

Haynes Publishing

GB0004160833

10.03.11

234.00

15.70 03.07.12

220.00

+ 0.7 %

Securidev

FR0000052839

10.03.11

26.89

1.50 03.07.12

35.99

+ 39.4 %

Creston

GB000 4440284

10.05.11

96.00

6.41 09.05.12

66.00

ERP5 best Selection UK, - 24.6 % Magic Formula & F-Score 7 ERP5 best Selection UK, - 17.7 % Magic Formula & 8,0 FScore 7 Magic Formula (5yr avg. + 77.7 % EBIT), ERP5BS & F-Score 8 + 52.5 % ERP5 best Selection UK & 7.5 Piotroski F-Score

Cello Group

GB00B0310763

10.06.11

42.00

0.55 07.06.12

34.00

Buongiorno SpA

IT0001488607

30.12.99

1.12

07.06.12

1.99

Molins

GB000 5991111

09.08.11

79.00

2.50 09.08.12

118.00

Trilogiq

FR0010397901

09.08.11

14.15

09.08.12

14.52

ERP5 best Selection + 2.6 % Europe, Magic Formula & 7.5 F-Score + 55.4 % Magic Formula (1yr) & 7 Piotroski F-Score

Advanced Inflight Alliance DE000 1262186

07.06.12

3.05

0.24 07.08.12

4.50

M&C Saatchi

GB00B 01F7T14

10.09.10

106.00

4.90 07.08.12

151.50

Magic Formula (5yr avg. + 47.5 % EBIT) & 9 Piotroski FScore

2 December 2013 Vol. 4 No. 12

12

Portfolio Update Europe


Recommendations Sold (sorted by recommended date)
Investment
Interior Services Group

ISIN
GB0002925955

Added Date Price


08.09.11 176.50

Dividend per share

Sold Date Price


121.00

Return %
- 22.9 %

Strategy

15.06 07.08.12

ERP5 best Selection UK & 7,5 Piotroski F-Score

Micropole

FR0000077570

08.09.11

1.21

07.08.12

1.04

ERP5 best Selection - 14.0 % Europe, Magic Formula & F-Score 7.5 ERP5 best Selection UK, - 17.3 % Magic Formula & 8 FScore 6 month price index + 34.5 % sorted by ERP5 & 5 Piotroski F-Score + 38.4 % Magic formula Europe, & F-Score 7.5

Logica

GB0005227086

08.07.11

132.30

4.40 09.09.12

105.00

LaCie SA

FR0000054314

10.02.11

3.59

0.33 09.10.12

4.50

Amadeus Fire

DE0005093108

08.11.11

27.80

2.84 08.11.12

35.64

William Hill

GB0031698896

10.12.10

167.00

18.80 06.12.12

345.40

Magic Formula & ERP5 + 118.1 % (1yr) & 8 Piotroski FScore + 57.6 % ERP5 relative strength Europe, 7,5 F-Score

freenet

DE000A0Z2ZZ5

30.11.11

9.80

0.80 06.12.12

14.64

Groupe Crit

FR0000036657

30.11.11

10.98

0.22 06.12.12

13.65

ERP5 best Selection + 26.3 % Europe, Magic Formula & 7 F-Score + 17.7 % ERP5 Best selection UK, 7 Piotroski F-Score

Phoenix IT Group

GB00B0315W65

09.01.12

155.00

7.00 09.01.13

175.37

Toupargel Groupe

FR000039240

09.01.12

9.75

0.40 09.01.13

5.71

ERP5 Best selection - 37.3 % Europe, 7,5 Piotroski FScore ERP5 relative strength + 26.5 % Europe 8,5 Piotroski FScore. ERP5 Best Selection + 4.4 % Europe 8 Piotroski FScore. + 98.9 % Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5

Unibet Group

SE0001835588

09.02.12

178.50

6.22 01.02.13

219.50

Zetes Industries

BE0003827442

09.02.12

15.56

0.55 01.02.13

15.69

Enterprise Inns

GB00B1L8B624

03.07.12

53.25

28.02.13

105.90

Proffice

SE0000470700

03.07.12

24.50

1.13 28.02.13

24.50

+ 4.6 %

Osiatis

FR0004044337

10.04.11

6.05

0.45 28.03.13

6.57

ERP5 best Selection, + 16.0 % Magic Formula & 7,0 FScore ERP5 best Selection, - 42.8 % Magic Formula & F-Score 7 - 4.6 % Price Index 6 months sorted by MF Price Index 6 months sorted by MF

Roularta Media

BE0003741551

10.04.11

24.58

0.64 28.03.13

13.43

Cairo Communication

IT0004329733

04.04.12

3.28

0.28 28.03.13

2.85

Know It

SE0000421273

04.04.12

67.00

3.25 28.03.13

55.00

- 13.1 %

Inficon

CH0011029946

10.05.11

192.00

30.00 30.04.13

289.00

ERP5 best Selection + 66.1 % Europe, Magic Formula & 7,0 F-Score

2 December 2013 Vol. 4 No. 12

13

Portfolio Update Europe


Recommendations Sold (sorted by recommended date)
Investment
Dragon Oil

ISIN
IE0000590798

Added Date Price


09.05.12 6.86

Dividend per share

Sold Date Price


7.38

Return %
+ 10.4 %

Strategy

0.19 30.04.13

Price Index 6 months sorted by MF Price Index 6 months sorted by Earnings Yield ERP5 BS Europe, Magic Formula & 7,5 F-Score

SMT Scharf

DE0005751986

09.05.12

21.30

0.98 30.04.13

23.89

+ 16.8 %

Koninklijke Brill

NL0000442523

10.06.11

14.00

2.13 30.05.13

21.60

+ 69.5 %

Regenersis

GB00B06GNN57

08.07.11

82.00

1.77 28.06.13

202.00

ERP5 best Selection UK, + 148.5 % Magic Formula & 7 Piotroski F-Score - 10.5 % Price Index 6 months sorted by ERP5 Price Index 6 months sorted by MF Price Index 6 months sorted by EY Price Index 6 months sorted by ERP5

Parrot

FR0004038263

02.07.12

23.90

0.00 28.06.13

21.38

Tipp24

DE0007847147

07.08.12

36.50

0.00 31.07.13

43.15

+ 18.2 %

Lookers

GB00B17MMZ46

07.09.12

72.25

2.35 28.08.13

124.50

+ 75.6 %

Xchanging

GB00B1VK7X76

07.09.12

117.50

1.00 28.08.13

122.00

+ 4.7 %

Etam Development

FR0000035743

28.02.13

18.40

0.00 23.09.13

23.00

Price Index 6 months + 25.0 % sorted by Value Composite 1 + 31.4 % ERP5 best Selection

Lectra

FR0000065484

07.10.11

4.91

0.44 30.09.13

6.01

Pandora

DKK0060252690

09.10.12

85.40

5.50 30.09.13

227.70

+ 173.1 %

Price Index 6 months sorted by MF Magic Formula (1yr) & 8 Piotroski F-Score Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 & MF Price Index 6 months sorted by ERP5 Price Index 6 months sorted by Earnings Yield

ADLPartner

FR0000062978

09.11.10

7.80

3.30 31.10.13

11.50

+ 89.7 %

Chime Communications

GB00B2QY9355

08.11.12

206.50

7.34 31.10.13

316.50

+ 56.8 %

Cision

SE0000291486

08.11.12

53.25

2.00 31.10.13

32.60

- 35.0 %

Creston

GB0004440284

06.12.12

76.63

2.67 29.11.13

92.40

+ 24.1 %

Picanol

BE0003807246

06.12.12

19.57

0.00 29.11.13

24.65

+ 26.0 %

Average Return
Source: Yahoo Finance and Financial Times

+ 24.2 %

2 December 2013 Vol. 4 No. 12

14

Portfolio Update North American


Buy Recommendations (sorted by recommended date)
Investment Exchange Stock Symbol Added Buy Price Price 29.11.13
Salem Communications NASDAQ SALM 03.04.12 5.01 8.99 0.26 + 84.6 % Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 & MF Price Index 6 months sorted by EY & ERP5 Price Index 6 months sorted by ERP5 & EY Price Index 6 months sorted by ERP5 & EY Price Index 6 months sorted by ERP5 & EY

Dividend

Return

Strategy

Inteliquent

NASDAQ

IQNT

02.07.12

13.25

11.59

4.38

+ 20.5 %

Northrop Grumman

NYSE

NOC

09.10.12

69.00

112.68

2.93

+ 67.6 %

Gannett Company

NYSE

GCI

08.11.12

16.63

27.06

0.80

+ 67.5 %

Oshkosh

NYSE

OSK

08.11.12

28.18

48.75

0.15

+ 73.5 %

GameStop

NYSE

GME

06.12.12

26.64

48.25

0.83

+ 84.2 %

Harris

NYSE

HRS

06.12.12

48.03

64.51

1.58

+ 37.6 %

Marathon Oil

NYSE

MRO

09.01.13

31.65

36.04

0.53

Price Index 6 months + 15.5 % sorted by Earnings Yield Price Index 6 months + 73.0 % sorted by Earnings Yield Price Index 6 months - 11.0 % sorted by Earnings Yield, ERP5, MF Price Index 6 months + 32.3 % sorted by Earnings Yield Price Index 6 months + 84.6 % sorted by ERP5, VC1, MF - 2.4 % Price Index 6 months sorted by VC1

Western Digital

NASDAQ

WDC

09.01.13

43.80

75.04

0.75

Joy Global

NYSE

JOY

01.02.13

64.15

56.56

0.53

TRW Automotive

NASDAQ

TRW

01.02.13

58.65

77.60

0.00

Alliant Techsystems

NYSE

ATK

28.02.13

65.80

121.23

0.26

Community Health Systems

NYSE

CYH

28.02.13

42.26

41.25

0.00

Crawford & Company

NYSE

CRD

28.03.13

5.30

7.80

0.11

Price Index 6 months + 49.2 % sorted by ERP5, EY, MF Price Index 6 months + 161.2 % sorted by ERP5, EY, MF + 61.8 % Price Index 6 months sorted by VC1 Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY

Gray Television

NYSE

GTN

28.03.13

4.69

12.25

0.00

High Arctic Energy Services

Toronto

HWO

30.04.13

2.31

3.65

0.09

Safeway

NYSE

SWY

30.04.13

22.52

34.97

0.40

+ 57.1 %

Science Applications International

NYSE

SAIC

30.05.13

31.63

36.85

0.28

+ 17.4 %

2 December 2013 Vol. 4 No. 12

15

Portfolio Update North American


Buy Recommendations (sorted by recommended date)
Investment Exchange Stock Symbol Added Buy Price Price 29.11.13
Leidos Holdings NYSE LDOS 30.05.13 42.66 48.63 1.12 + 16.6 % Price Index 6 months sorted by EY Price Index 6 months sorted by VC1 Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY Price Index 6 months sorted by VC1 Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY Price Index 6 months sorted by VC1 Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY Price Index 6 months sorted by VC1 Price Index 6 months sorted by EY

Dividend

Return

Strategy

Trans World Entertainment

NASDAQ

TWMC

30.05.13

4.59

4.35

0.00

- 5.2 %

Ark Resturants

NASDAQ

ARKR

28.06.13

21.15

21.50

0.00

+ 1.7 %

SL Industries

NYSE

SLI

28.06.13

25.08

30.50

0.00

+ 21.6 %

VSE Corporation

Nasdaq

VSEC

31.07.13

43.28

51.22

0.09

+ 18.6 %

WellPoint

NYSE

WLP

31.07.13

85.56

92.88

0.38

+ 9.0 %

Exelis

NYSE

XLS

28.08.13

14.78

17.67

0.10

+ 20.3 %

Seagate Technology

NASDAQ

STX

28.08.13

38.51

49.04

0.43

+ 28.5 %

ITT Educational Services

NYSE

ESI

30.09.13

31.00

38.99

0.00

+ 25.8 %

Sanmina Corporation

NASDAQ

SANM

30.09.13

17.49

15.48

0.00

- 11.5 %

Stone Energy Corp

NYSE

SGY

31.10.13

34.86

33.08

0.00

- 5.1 %

Tenneco

NYSE

TEN

31.10.13

53.07

57.40

0.00

+ 8.2 %

Handy & Harman

NASDAQ

HNH

29.11.13

24.53

24.53

0.00

+ 0.0 %

Macro Enterprises

Toronto

MCR

29.11.13

6.69

6.69

0.00

+ 0.0 %

Average Return
Source: Yahoo Finance and Financial Times

+ 34.5 %

Disclosure: I do not have an investment in any of the North American Buy Recommendations.

2 December 2013 Vol. 4 No. 12

16

Portfolio Update North American


Recommendations Sold (sorted by recommended date)
Investment
Comtech Telecommunications

Symbol

Added Date
07.10.11

Dividend per share


1.10

Sold Date
09.10.12

Return Price
27.35

Strategy

Price
30.99

%
- 8.2 % ERP5 BS North America, Magic Formula & 7 F-Score

CMTL

Gamestop Corp

GME

07.10.11

24.33

0.55

09.10.12

23.99

ERP5 BS North America, + 0.9 % Magic Formula, RS & 7,5 FScore ERP5 BS North America, + 6.0 % Magic Formula, RS & 7,5 FScore - 8.9 % ERP5 BS North America, RS & 7 F-Score ERP5 BS North America & 7 F-Score ERP5 BS North America & 7 F-Score ERP5 BS North American & 8 F-Score ERP5 BS North America & 8 F-Score ERP5 BS North America & 7 F-Score 6 month price index sorted by ERP5 & 6 F-Score Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 Price Index 6 months sorted by ERP5 & MF Price Index 6 months sorted by MF

L-3 Communications

LLL

08.11.11

70.97

1.50

08.11.12

73.73

NASDAQ OMX Group

NDAQ

08.11.11

26.00

0.13

08.11.12

23.56

Black Box

BBOX

30.11.11

28.53

0.30

06.12.12

25.02

- 11.3 %

Glacier Media

GVC

30.11.11

1.95

0.09

06.12.12

1.76

- 5.1 %

Ceradyne

CDY

09.02.12

33.74

0.45

06.12.12

35.00

+ 5.1 %

DeVry Inc.

DV

09.01.12

41.30

0.15

09.01.13

24.00

- 41.5 %

L.B. Foster Co.

FSTR

09.01.12

28.67

0.09

09.01.13

44.13

+ 54.2 %

Softchoice

SO

09.02.12

12.40

0.14

01.02.13

12.43

+ 1.4 %

Meredith

MDP

03.07.12

32.34

1.56

28.02.13

42.02

+ 34.8 %

Rent-A-Center

RCII

03.07.12

33.55

0.69

28.02.13

36.28

+ 10.2 %

Almost Family

AFAM

03.04.12

24.87

2.00

28.03.13

20.43

- 9.8 %

Navigant Consulting

NCI

09.05.12

12.81

0.00

30.04.13

12.33

- 3.7 %

VAALCO Energy

EGY

09.05.12

8.13

0.00

30.04.13

6.72

- 17.3 %

G-III Apparel Group

GIII

07.06.12

25.13

0.00

30.05.13

41.86

+ 66.6 %

Veeco Instruments

VECO

07.06.12

33.52

0.00

30.05.13

42.60

+ 27.1 %

Littelfuse

LFUS

02.07.12

56.73

0.80

28.06.13

74.61

+ 32.9 %

2 December 2013 Vol. 4 No. 12

17

Portfolio Update North American


Recommendations Sold (sorted by recommended date)
Investment Symbol Added Date
07.08.13

Dividend per share


0.00

Sold Date
31.07.13

Return Price
133.60

Strategy

Price
98.00

%
+ 36.3 % Price Index 6 months sorted by MF Price Index 6 months sorted by EY Price Index 6 months sorted by ERP5 Price Index 6 months sorted by MF Price Index 6 months sorted by ERP5

Daily Journal

DJCO

HollyFrontier

HFC

07.08.13

39.42

3.45

31.07.13

45.55

+ 24.3 %

Dorel Industries

DII.B

07.09.12

33.95

1.23

28.08.13

35.70

+ 8.8 %

RPC Inc.

RES

07.09.12

12.71

0.58

28.08.13

14.50

+ 18.6 %

CF Industries Holdings

CF

09.10.12

218.17

1.60

30.09.13

210.83

- 2.6 %

Average Return
Source: Yahoo Finance and Financial Times Notes:

+ 9.5 %

The Quant Value portfolio is an equally-weighted strategy and does not include dealing charges to purchase or sell securities, if any. Taxes are not included in total return calculations. Return includes gains from price appreciation, dividend payments, interest p ayments, and stock splits. For securities not quoted in Euro the total return is shown in the currency the security is quoted in. Sources for price data: Yahoo! Finance (finance.yahoo.com), Financial Times (www.ft.com), and company websites.

The Quant Value investment newsletter is published by Serendipity Ventures (UG) haftungsbeschrnkt a limited liability company incorporated in Germany. The companys address is Von -Eicken-Str. 13a, 22529, Hamburg, Germany. Telephone: +49 40 2261 1607, Email: tim@quant-value.com

2 December 2013 Vol. 4 No. 12

18

Disclaimer
General Note This newsletter and its content are provided to you for informational purposes only and any discussion of past performance of any security, other investment or investment strategy should not be considered as being indicative or a guarantee of future performance. It does not constitute personalised financial advice nor an endorsement or solicitation to make any investment. Please do your own due diligence or hire a financial advisor before making any investment decisions. Its your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought. The price and value of securities referred to in this newsletter will fluctuate. Loss of all of the original capital invested in a securities discussed in this newsletter may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. You acknowledge that you understand that, due to many factors over which neither we, actual and subsequent events, performances and/or outcomes may differ substantially from any estimates, projections or predictions that might have been made in this newsletter. This research is, to the best of our knowledge, based on generally accessible sources which are reliable and accurate. However, no liability can be accepted for any errors or inaccuracies in information derived from these sources. The information in this publication has not been checked for accuracies or relevance to current events. Consequently, no liability can be assumed for the completeness and accuracy of this report. Serendipity Ventures (UG) haftungsbeschrnkt has a subscription and advertising based revenue model and it or the analyst will not receive any compensation for providing specific information, data, opinions, estimates and projections as well as recommendations in this report. The author received no compensation and is not affiliated with the company reviewed in this report with the possible exception of being a shareholder. Company Specific Disclosures This publication constitutes research of a non-binding nature on the market situation and the investment instruments cited here at the time of this publication on 29.11.2013. Indicated time horizon recommendation is 12 months. of investment

2 December 2013 Vol. 4 No. 12

19

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