Monthly report - DNCA Investments

Centifolia
French Equities
Monthly report
| 31 January 2017
Inception date : October 4, 2002
Share C : ISIN code FR0007076930 - Ticker Bloomberg DNCACEC FP EQUITY
Countries of
distribution
INVESTMENT OBJECTIVE
The management objective is to seek a higher performance
than that on the CAC 40 index over the recommended
investment duration (5 years), dividends reinvested. To be able
to achieve the management objective, the UCITS investment
strategy is based on discretionary management via a stockpicking policy, which does not aim to duplicate the benchmark
indicator.
PORTFOLIO MANAGERS COMMENTS
After a sharp rally in December, the European equity markets
have embarked on a phase of consolidation. Economic
indicators remain on a positive trend (GDP in the Eurozone
announced at +1.7% in 2016 and inflation 1.8% in January) and
confirm that the bloc has kicked off a reflationary cycle, but
forthcoming elections are reining in investor risk appetite.
Centifolia shed 2.72% over January compared with a 2.32%
drop on the CAC 40 Net Return. The first earnings reported
were a mixed bag for the fund: STMicroelectronics pulled off a
positive surprise with earnings well ahead of expectations and
announced a sound outlook for the current year, but
Technicolor was particularly disappointing as it announced a
tough 2017 and expectations well below earnings forecasts. The
stock was immediately penalized, plummeting 23% over the
month, and this decline alone explains the portfolio’s
counterperformance in January. It is worth remembering that
with 11% of assets invested in financial stocks and 33% in TMT,
the fund can be subject to severe fluctuations during earnings
season, but these are very deliberate sector choices as result of
the valuation discount these businesses carry. The fund is still
fully invested, and we made only minor adjustments this month:
we slightly cut back our holding on STMicroelectronics, which
accounts for 5% of assets, and also trimmed our position on
Sanofi. After investing in Carrefour in August, Centifolia
definitively wound down its holding on Casino.
Pending elections in France, international investors remain
cautious on the French market. The slight deterioration in the
French credit signature on the fixed income market confirms
this stance. However, it is likely that political risk is overestimated
at this stage and we will probably see a relief-induced rally after
the elections. In this respect, the return of financial transactions
(Safran’s bid for Zodiac, Essilor-Luxotica merger, rumors on
Generali) bodes well for the year.
Text completed on February 1, 2017
Jean-Charles MERIAUX - Igor de MAACK - Marie-Claire MAINKA
PER (Price Earnings Ratio) is the ratio of market capitalisation to net earnings. It is a
way of estimating how expensive a share is.
Net debt is gross financial debt adjusted for the cash pile
ND/EBITDA is the ratio between net debt and gross operating profit. It helps estimate
a stock's financial leverage.
EV/EBITDA is the ratio between enterprise value (market capitalisation + net debt)
and gross operating profit. It helps estimate how expensive a share is.
DATA AS OF 01/31/2017
Fund
Index*
YTD performance
-2.72%
-2.32%
Performance 2016
4.64%
7.67%
5 years annualized perfomance
10.71%
10.31%
17.40%
1 year volatility
15.32%
3 years volatility
16.12%
18.24%
5 years volatility
15.71%
17.17%
*CAC 40 NET RETURN
Past performance is not a guarantee of future performance
MAIN CHARACTERISTICS AS OF 31/01/2017
NAV
Net yield 2016
Estimated PER 2017
€322.03
3.10%
14.3 x
Net assets
ND/EBITDA 2016
EV/EBITDA 2017
€1,644 M
1.4 x
5.7 x
PERFORMANCE SINCE 10/04/2002
CE NTIF OLIA - C
350
CAC 40 NE T R E TUR N
222.03%
300
155.65%
250
200
150
100
10/2002
08/2005
06/2008
05/2011
MAIN HOLDINGS
03/2014
01/2017
MAIN COUNTRIES
ORANGE
6.71%
FRANCE
96.5%
SANOFI
6.05%
FINLAND
3.0%
GROUPE FNAC
5.47%
STMICROELECTRONICS
5.19%
THALES
5.01%
BREAKDOWN BY SECTOR
Technology
Media
Industrial Goods & S ervices
Banks
Construction & Materials
R etail
Automobiles & Parts
Telecommunications
Health Care
Oil & Gas
Food & Beverage
Travel & Leisure
Personal & Household Goods
Utilities
Insurance
R eal estate
Basic R esources
Cash and equivalents
1.1%
0.8%
0.8%
0.3%
0.1%
0.5%
6.8%
6.7%
6.0%
5.3%
5.2%
2.6%
8.2%
12.7%
12.1%
11.1%
10.1%
9.6%
RISK AND REWARD PROFILE
Lower risk
Higher risk
Lower potential reward
1
Higher potential reward
2
3
4
5
6
7
The risk level of this fund is due to exposure to equity market
DNCA Investments is a trademark held by DNCA Finance. This promotional document is a simplified presentation and does not constitute a subscription offer or an investment recommendation. No part of this document may be reproduced, published or
distributed without prior approval from the investment management company. Past performance is not a guarantee of future performance. The performances are calculated net of any fees by DNCA FINANCE. Access to products and services presented may
be restricted regarding certain persons or countries. Tax treatment depends on the individual situation of each investor. All subscribers must receive the KIID prior to making a subscription. For full information regarding strategies and fees, please refer to the
prospectus, KIID documents and other regulatory information available on our website www.dnca-investments.com or free of charge on demand from the investment management company’s registered offices. DNCA Finance - 19, place Vendôme - 75001
Paris - tel.: +33 (0)1 58 62 55 00 - email: [email protected] - www.dnca-investments.com - dedicated intranet site for independents. An investment management company authorised by the AMF (Financial Market Authorities) under number GP 00030 on 18 August 2000