Understood. Thank you for the details.
My CSPs still had 1-2 weeks of life left but they were assigned before expiration as they were deep ITM.
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Experienced that once, too, although the Put was only at the money or maybe a tiny bit ITM.
I remember feeling quite surprised, but I guess this is part of the American style option where the buyer can exercise before expiry if e.g. they need the cash.
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Throw Goofy a bone and surely he’ll chew on it. 
*
I’m starting to chew on this bone and am slicing (breaking?) it across these three kinds of risks:
- fundamental risk: what can impair cash flow, put the payout in jeopardy, and potentially result in total losses (Buffett’s definition of risk)
- valuation risk: so overpaying for a quality company that even if it grows as expected you might suffer years or decades of weak or even negative returns (one of Chuck Carnevale’s key risk definitions)
- volatility risk: becoming a forced seller out of financial/emotional reasons even of quality companies bought at reasonable or attractive valuations
(quoted unhumbly from your mostly friendly neighborhood goofy dog, yours truly here)
Fundamental risk:
A little hard to tell given it is a microcap. It’s been in business since 1978 with a couple of murky episodes in the first couple of decades, but seems steady and growing for about the past two decades or so.
Their primary products are healthcare for women and their babies, they are geographically somewhat diversified (60% US, rest among other English speaking countries).
Conclusion after the whole exhausting 5 minutes of relentless scouring their Bloomberg description: doesn’t look like a whale oil or a snake oil company, not exactly $ES or $JNJ, either, but probably … or at least maybe, fine?
Valuation risk:
FASTgraphs is partially letting me down on this one as apparently FactSet doesn’t have any recent earnings data …
… but at least there’s some more recent Operating Cash Flow (OCF) data:
Looking already promising as price seems already below the anticipated (and probably fair) 15 x 2024 OCF (extrapolated by Goofy’s pea sized brain from the existing line on the graph).
Luckily there’s other data providers, just not in the nice graphical visualization as I prefer it. Based on the earnings metrics data from your link as well as mighty Bloomberg tell us that the company continued growing since 2019 (with a bump or two):
while the PE and other multiples sank (as desired), especially recently:
The only thing that I would want to dig deeper on is that their trailing twelve months cash flow seems to be at (only) $5.69 (per share) versus their 2023 number of $6.13 (or $6.14 according to Bloomberg). Maybe some seasonality with a stronger second half of the year?
Volatility risk: well, my more sophisticated friends on this channel call this the sequence of returns risk, but I like the blunt term volatility risk better as it’s IMO closer to the reality of life where you need to unexpectedly withdraw a gazillion k of your (volatile) investments because of unexpected life event X regardless of the valuation of your investment(s) at the time instead of just withdrawing your planned 3.967614% (rounded) of your holdings in that year.
Anyhow … volatility risk is probably mostly out of your control even with decades of backtesting, as your specific case of needing cash in year Y isn’t included in the historic set of data for backtesting safe withdrawal rates.
Maybe, constructively speaking, the less volatile your specific investment (say, again, $JNJ) the less exposed you are to this, even when the surprise withdrawal is triggered exongenously.
UTMD isn’t in the $JNJ category here – no surprise, given it’s a microcap and somewhat more volatile fundamentals – but you also don’t have to put 50% of your investable income into it.
Diversification is your rescue boat here.
Goofy liked this bone, but is holding off buying into it for now.
Woof!
* In ernest, I like these potential throws and truly enjoy taking a stab at them with my tools at hand!
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I’m trying to reduce stocks but finding it hard to part with them. I’m at 75/25 stocks/bonds and want to get back to 60/40 or even 50/50.
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What criteria do you look at for your individual stocks? Balance sheet, management, or any technical indicators? Or several at the same time?
Off topic response because point is interesting: Gen X and to a large extent Gen Y (I guess I fall here) grew up in times of huge optimism that big problems for the world seemed to have been solved (Cold War drawing to a close was a big one). Yes, we were worried about AIDS and drugs but I clearly remember being told that it can’t “just happen” to someone, they need to make poor choices to fall into drugs or get infected with HIV. Growing up in Greece in the 80s-90s there was constant bombardment of anti-drug/safe sex information, I believe some of it stuck with us despite being pretty basic (“don’t accept a cigarette making rounds, don’t accept anything by anyone in a party, drugs are not cool, always wear a condom”)
My guess is that Gen Z has seen that the boomers (the real boomers, not what is used to describe anyone who can string 2 sentences without grammatical or spelling errors) royally fornicated with their future, so they say “who cares, the world is going to scheisse anyway”.
Incidentally, I was amazed by how many people smoke in CH.
Edit: interestingly, I can’t help but think back, so many things being discussed by my parents and their friends in the 80s as potential world problems in the future such as immigration, nationalism, climate change - I can’t remember the discussions because I was a kid - were sort of glossed over by economic boom times, and came roaring back as huge problems in 20XX onwards.
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I’m using your CH reference as an excuse to look at some Swiss companies with the only tool in my toolbox: the FASTgraphs hammer!
I skimmed the 200+ SPI constituents and came up with a sobering short short list.
I’ve concluded that stock picking for me isn’t really about picking stock, it’s about being picky about stocks …
Only three companies that I would consider today and maybe a good dozen that I would put on my near term watch list.
The short list(s):
Buy Candidates: Worth a deeper look, above the first cut.
-
Mobilezone
Undervalued given their growth, fairly valued given how the market has valued the company historically. A bit cyclical and so so (but overall growing) dividend history. Attractive earnings yield* and attractive dividend yield (though perhaps a payout ratio currently a tad too high?).
Acceptable analyst scorecard.** -
Roche
Slightly undervalued (would have been a better buy in March 2024), but steady dividend growth, acceptable earnings growth. Some cyclicality. -
Valiant
Undervalued, ok earnings (& dividend) growth since about 2014, nice earnings yield* and dividend.
Contenders: Didn’t make the cut for various reasons.
-
Banque Cantonale de Genève
Undervalued (even compared to their historic multiple of about 11), great earnings yield* of 11%, nice dividend growth in the past decade.
Caveat: underlying data (from FactSet) seems to be missing between 2011 and 2022 – perhaps this graph looks a whole lot uglier with actual data.
Looking at Bloomberg I don’t see any historic EPS, either.
One would have to look at the published earnings statements (left as an exercise for the reader). -
Berner Kantonalbank
Possibly slightly undervalued (earnings estimates seem to be missing), but nice dividend growth since 2003.
Caveat: underlying data (from FactSet) seems to be missing before 2014 – perhaps this graph looks a whole lot uglier with actual data. -
BKW
Slightly overvalued, a bit cyclical, but nice ~double digit earnings (and dividend) growth. -
Cembra Money Bank
Slightly undervalued, slow growth, but at least steady. -
Forbo Holding
Fairly valued, slow (but mostly steady) growth. -
Glarner Kantonalbank
Undervalued, but no growth since COVID and frozen dividend. -
Holcim
Just about fairly valued, cyclical, apparently ok growth ahead, but analysts keep overestimating the company’s earnings. -
Julius Baer
Seemingly fairly valued (undervalued given the anticipated growth), quite regularly rocked by scandals (e.g. under the previous CEO they invested in the now collapsed Signa Group).
Analysts consequently have a hard time making good estimates about the company’s earnings. -
Meier Tobler
Note: looking at Operating Cash Flow
Cyclical as hell (even worse when looking at Adjusted Operating Income), but seemingly undervalued. Analysts keep overestimating income/cash flow, though. -
Mikron
Seemingly undervalued, but cyclical and declining earnings again. -
Swiss RE
Cyclicality not for the faint of heart. Relatively steady dividend growth since the GFC, but negative earnings outlook … -
UBS
Stellar growth expectations, but somewhat horrific analyst scorecard.
Disclosure: I own them, bought them just before the COVID crash.
-
Vontobel
Probably slighty undervalued given expected growth (but analysts’ earnings estimates miss a lot). Ok earnings (÷nd) growth. Nice dividend yield. -
Zurich
Just about fairly valued, ok earnings and dividend growth, recently seemingly accelerating.
Nice dividend yield.
Some final thoughts:
Don’t get me wrong, there are a bunch of great businesses in the SPI (Nestlé, Novartis, some of the ones listed above, etc), it’s just that many of them are (IMHO) overvalued.
I’ll provide one perhaps less know example for a great company at the wrong price:
VZ Holding
Great and steady earnings growth over the past 20 years, still growing them at a nice double digit cliff, very steady and growing dividend across the past two recessions, etc etc.
Being patient you can pick them up below their fair P/E of 15 (or at least not a lot above it).
Currently it trades at almost 24 x earnings. Probably still fine in the long run, but if I had to choose today between VZ Holding and, say, Mobilezone or Valiant, the latter two seem more attractive to me from a near to mid term perspective (next couple of years to maybe three to five years out).
* Earnings Yield: if you bought the entire company at its current price, your current yield in earnings would be 11% of the price paid.
** Analyst scorecard: lots of misses mean that analysts kept overestimating the company’s earnings.
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Wow, your list of swiss companies is approximately the reverse of mine. The main reason is that I don’t buy banks or insurance companies
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Not entirely sure which list you’re referring to?
My above-the-cut list (companies I would do further research on before buying) like Mobilezone, Roche, or Valiant?
Or my below-the-cut list (companies I would not buy but maybe keep on my watchlist)?
The entire SPI?
Sorry if I misunderstood.
Any reason for that choice?
Not questioning your choice, just trying to understand why you would shun these sectors/industries entirely.
Both your candidates and watchlist (except Roche) are not part of the 20 companies I find the best.
Banks can have big unexpected problems (look at Credit Suisse) that most other companies can’t have and that can litteraly kill the company. When for example Nestlé has some serious mortal bacteries in food on a large scale, even the specific brand doesn’t dissapear. Insurance is probably not as dangerous but can have similar problems too
I had Cembra and Holcim, but now sold.
I’m not making any recommendations, just sharing my observations.
You do with this whatever you like. Pick the top 20 you like best.
Be well and invest well!
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Bought RBKL in april as my first stock, up 50% now and expecting a lot more growth in the next years. Also picked up some intel and Nike.
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@_MP : this looks like SPAM (or worse), I’m afraid, even if said member has been part of the forum for a while.
Reason: post is completely unrelated to forum topic and promotes stocks.
Please act as you see fit?
I retract, I still don’t get the RBKL reference, but maybe that’s just me.
Sorry about any noise?
How often do you reasses the stocks in the universe you monitor?
Basically you would need to check periodically all existing investments and the investable universe and adjust the portfolio. Isnt that a looooot of work?
What’s that anyway? Doesn’t exist as a stock ticker as far as I see.
I wonder where would ABB fit 
Slightly tongue in cheek, and very much “I heard from a friend”, but last year I did hear from a friend who’s an engineer currently with Siemens and tried, unsuccessfully, to join ABB, that ABB is “going to the m00n”. It does seem to be going to the moon (language used is deliberate for effect!).
I’m pretty sure it wouldn’t make your cut @Your_Full_Name.
Well, Ok, seems Stockpickers with dyslexia should do extra due diligence!
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Agree. The most recent post as well