Martine Hafkamp’s 5 favorite shares: ‘This Swiss oldie is about to uncover value’

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May 6, 2024
Today at
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Martine Hafkamp, ​​the general manager of Fintessa Asset Management, in addition to her preference for tech and AI, also focuses on oil and cement.


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With her previous selection on May 8, 2023, Martine Hafkamp achieved an average return – in euros and without including dividends – of 60.7 percent. During that period, the Stoxx 600 achieved a return of 11.3 percent, the S&P500 of 27 percent.

Alphabet | ‘Ample cash to reward shareholders’

The largest advertising seller in the world presented excellent figures for the first quarter. Turnover showed the strongest increase since the beginning of 2022. For all components, YouTube, Cloud and Traffic (clicks), turnover was higher than expected. The cloud activities have been contributing to profits for more than a year. Compared to last year, quarterly profit quadrupled to $900 million. The total cash position fell slightly, from $110.9 billion to $108 billion, but still more than enough to reward shareholders. For the first time in the existence of Alphabet

a quarterly dividend of 20 dollar cents will be paid on June 17. The share buyback program will be increased by $70 billion.

Tesla’s Elon Musk may boast about the arrival of robot taxis, but Alphabet is much further ahead and already has such cars in Phoenix and San Francisco. The Waymo division is far ahead in the development of autonomous driving. Alphabet shares are not expensive with a price-earnings ratio of 21 for next year and 19 for 2026.

ASML | ‘Investors underestimate the sparkling year 2025’

The order intake in the first quarter disappointed investors. However, they do not count beyond the fact that ASML

has previously indicated that 2024 is a transition year and that 2025 will be a very successful one. Large companies are currently investing heavily in chips (the CAPEX of Amazon, Alphabet, Nvidia and Meta together for this year is 240 billion dollars!) and ASML machines are needed for this. In addition, chip manufacturers (TSMC) are investing in factories outside Asia. ASML machines will also be located here. The first machine that will succeed the EUV machines has already been delivered to Intel.

The competition will not be able to lag behind. ASML is therefore sticking to its annual outlook and is counting on a stronger second half of the year in the run-up to the peak year of 2025. The ASML share is not expensive with a price/earnings ratio of 29 for next year and 25 for 2026. The profit margin is above 50 percent.

Holcim | ‘American branch can unlock value through IPO’

The world’s largest cement maker continues to grow despite headwinds from a strong Swiss franc. The company is diversifying. Good money is being made in roofing, especially in the United States where several acquisitions have been made. Holcim

continues to string beads with relatively small acquisitions. The company wants to achieve at least 30 percent of its turnover from ‘Solutions & Products’ by 2025. These are sustainable solutions for construction and ready-made products. The division is much less capital intensive than the cement factories. This is good for the profit margin.

There is enough money for acquisitions after the sale of the cement activities in Brazil and India. And even more money is being released. Holcim plans to take its North American division public next year. This is expected to release a lot of hidden value. The attractive price/earnings ratio of less than 14 for this and next year and the dividend yield of almost 4 percent make this share a candidate for purchase.

Nvidia | ‘Phenomenal profit margin’

This designer and seller of computer processors really needs no explanation. The powerful computing chips required for the development of AI are provided by Nvidia

. Of course there are more suppliers, but Nvidia’s chips are the best. They are the most powerful and the smallest. Although Nvidia has already had a very strong run, we believe there is more to come. Nvidia will become the most valuable company in the world in the near future, dethroning Microsoft. Thanks to its phenomenal profit margin, Nvidia is inexpensive. For next year we will pay 29 times the profit and for 2026 only 27 times.

Shell | ‘Much cheaper than American peers’

Shell

has been in the spotlight lately. Firstly, oil remains in high demand, despite the energy transition, and oil prices are rising as a result. A price above 90 dollars per barrel is not far away, also because OPEC continues to suppress production. Secondly, the world is slowly coming back from the energy transition, although development will of course continue. But car manufacturers are again paying more attention to cars with a fossil fuel engine, wind farms are often not profitable and projects that produce renewable energy cannot use the energy due to overloaded electricity networks. LNG as an energy source is therefore becoming increasingly interesting and Shell is one of the largest traders in LNG.

Finally, Shell is much cheaper than its American peers. If Shell continues its move to the United States, the valuation could increase, just like the share price. The dividend yield is 3.5 percent. In addition, Shell buys back its own shares every quarter.

The article is in Dutch

Tags: Martine Hafkamps favorite shares Swiss oldie uncover

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