Rémi Le Bailly: Hello everyone. Thank you for your loyalty and your many questions. I’ll start by answering a question that wasn’t asked of me, but since the subject has given rise to many comments from you in recent weeks, I’ll start with it.
This is Albioma. The result of the takeover bid after reopening was known last week. KKR has, this time, crossed the bar of 90% of the capital and voting rights. It will therefore be able to implement a squeeze-out procedure, at 50 euros per share. This time the shareholder will no longer have the choice of whether or not to tender his shares to the offer, he will be obliged to do so. He is expropriated.
Remember that we felt that the price was not high enough and that we had advised to keep the titles. Too few investors were of our opinion. For those who had kept the titles, the operation is neutral. This amounts to the same as if they had tendered their securities to the offer. After this first “false” question, let’s now move on to the real ones…
Theo: Hello Mr. Le Bailly. After following your advice to sell when the Cac was at its zenith, I remain invested at 30%. Also, my question: should we sell or when should we replace it (inflation, risk of a crash, etc.)? Cordially.
Rémi Le Bailly: Thank you twice Theo. First of all because you congratulate me, which is always a pleasure, and then because your question is fully in tune with the questions of the moment.
Indeed, the environment is not good. The clouds are gathering and the market has pulled back sharply over the past week. Despite this, as you have no doubt read in the investment leads published in this week’s weekly, the market generally falls more sharply when the economy falls into recession, which is the scenario of many financial institutions and the low point is reached after the onset of recession.
This therefore means that if this scenario occurs, we will have to wait several quarters before hitting the low point. But these are only averages observed in the past (since the early 1970s). Each situation is unique. For one reason or another (more efficient central banks, end of the war in Ukraine…), the economy can turn around, which would avoid this dark scenario.
This means that being 100% liquid is a bet that can be risky. If the market turns around you will miss the beginning of the rise… You are invested at 30%, that seems to me to be a good compromise. Keep high-quality stocks that have proven their worth in the past.
As for your question “when to reinvest”, i.e. when to reinvest, you will have understood that I think it is better to wait until the economy enters a recession (if the most probable scenario materializes), or that it restarts having avoided the recession.
Didier: In your opinion, given the current situation (war in Ukraine), what threshold will the Cac 40 have reached on December 31, 2022? Thank you in advance for your answer.
Rémi Le Bailly: I think it will be below 6,000 points or even 5,500 if the prospect of a recession is no longer in doubt.
Victor70 : Hello Mr Le Bailly. I followed the recommendation to buy Chargeurs shares, especially since the announced yield was high. Should we keep these titles pending a rise? Moreover, the Investir site does not include an error on dividends: you announce a dividend of 1.24 euros… But elsewhere you document 0.76 euros. Thanks for your precisions.
Rémi Le Bailly: We devoted an article to Chargeurs in the weekly this week. We have gone from “purchase” to “speculative purchase” because there is obviously a certain distrust of the company, whose results remain generally satisfactory.
In addition, with regard to the dividend, the company paid its dividend of 1.24 euros for the 2021 financial year in two instalments. A deposit of 0.48 euro at the end of last year and a supplement, called balance, in April. Most companies distribute the dividend in one go, but others do it in two or even four instalments, such as TotalEnergies.
For the 2022 financial year, Chargeurs has decided to pay a deposit of 0.22 euros which will be paid on October 6. We expect a total dividend of 0.50 euro for the full year.
Minouchat: Hello Mr. Le Bailly. I made a downward average on Orpea at 25 euros, do you think we should do the same at 14/15€? The value of the housing stock alone is, I think, higher than the current stock market value, but by how much? Given the massacre of value but nevertheless still full EPHADs, could a takeover bid arise? Cordially.
Rémi Le Bailly: Many of you ask me about Orpea. To start, I remind you that I am very suspicious about falling averages. It is too often a way for the investor not to recognize that he was wrong.
The title will probably be worth more than today in 5 years. In 2, I’m not sure. We advise to keep because it is too late to sell.
Mmaxx: Hello, was there a clerical error in your section “Managers selling short” in your last edition, where the paragraph devoted to Alstom and Vinci refers to a railway specialist and a group computer science ? Thank you for your chat and, in advance, for your clarifications.
Rémi Le Bailly: Well seen. You should have read Atos and not Vinci. Sorry for this mistake.
Contrariant: What is your new opinion on the M6 share after the abandonment of the merger project with TF1?
Rémi Le Bailly: If you participate in this chat, you also read our advice on the site. At the beginning of the afternoon, we published an article in which we recommend going on sale on M6, which was the company, a priori, the most favored by the TF1-M6 marriage. We remain on the purchase of TF1 which benefits (like M6 moreover) from a generous dividend and which has a greater potential for improving its profitability.
Gim: Hello Mr. Le Bailly, how many GTT shares are still held by Engie? Thank you for your reply.
Rémi Le Bailly: Engie has just lightened its position again at the end of last week, by selling 6% of the capital. This weighed on the title on Friday. Engie still has around 5% of the capital and has undertaken to keep them for at least a year. In addition, Engie issued, in May 2021, zero coupon bonds with a maturity of 3 years, redeemable in GTT shares. This represents approximately 10% of the capital.
Your implied question is about the risk of “returning paper”. It therefore seems excluded for 1 year. Then there is the potential arrival of 5% on the market in 1 year, then 10% in two years. But in the latter case, bond subscribers can decide to keep all or part of their securities.
I remind you that we are buying GTT, a company that is benefiting from the “boom” in natural gas liquefied, which is a way of reducing Europe’s dependence on Russian gas.
Maseti: Hello, I’m trying to get a clearer picture of property companies. After reading La Cote on Saturday, I don’t know which ones to choose between Icade, Argan, Gecina and Nexity (depending on their debt, ability to rebound, yield, etc.). Thank you to enlighten me. Cordially.
Rémi Le Bailly: We are buying these 4 property companies, but they have very different profiles. Gecina, present in residential real estate, is the safest. Argan is the most dynamic value because it evolves on the buoyant logistics market, but its yield is less attractive. Nexity and Icade have a riskier profile, especially Nexity which is a promoter, but these last two securities are highly discounted…
Pierre: Hello Mr. Le Bailly. What is your opinion on ABC Arbitrage? Indeed, given the current high volatility of the markets, I thought that this value could be interesting, especially since the yield is good and it was, a few months ago, in your Top 10 Yield. However, I find it very disappointing for several months, with a price that is only going down… Thank you for your opinion.
Rémi Le Bailly: Very disappointing is a little harsh. The action is down about 5% since the beginning of the year and over one year, when the Cac 40 yields, him, 15% since the beginning of the year and over one year. The company paid a dividend of 40 cents (in four instalments) for the 2021 financial year, which means that its reinvested dividend performance is more or less stable over the year.
We will know more tomorrow about the effect of volatility on the accounts, since the company will publish its results for the first half.
Nicolas: Hello Rémi, I own 130 UMG Group shares for an average of 22 euros. The title has not done anything for quite a long time, should we sell and strengthen Vivendi? Or should we hold on and do you think the music will pick up again? Thank you for all those chats and replies.
Rémi Le Bailly: I would tend to keep the UMG titles. The action was introduced too expensive but the music sector is quite defensive. Which is pretty good in the current environment.
Ron: Hello, with the rise in rates is there still time to invest on credit in SCPIs?
Rémi Le Bailly: Of course, it is less interesting than some time ago, but the rate of credits is still quite significantly lower than the performance of SCPIs. This also makes it possible to smooth the investment effort over time. You just have to negotiate your credit rate well in an environment that is not the easiest…
Thank you all for your questions. I couldn’t process them all, there were too many.
Don’t hesitate to try your luck again next week. You will find on this occasion the friend Denis. Have a good week everyone and see you soon.