Dividend from Deere: February 2017

John Deere, Logo, 2017


Deere decided to pay out a dividend to me and for my 30 shares I received 16.62 € and I had to pay 2.49 € in taxes which left me with 14.13 €.

To find out more about Deere then please visit analysis of Deere 2015.

To see my yearly dividend earnings then please visit the Stock Dividends page that will shortly be updated.

Stocks bought February 2017: BP and ETF Portugal

I read an article the other day concerning the richest man in Belgium, an activist investor of the name Albert Frere, and how he has now stepped into Hugo Boss with a 3% stake and is planning to expand it. What I found very interesting was that he seemed to have stepped into Adidas at a similar moment of time as I did and he apparently decreased that holding a little lately, while I sold off all of it. I hope that he has a slightly better reason for why he bought Hugo Boss than I do but I am happy to now know that I will benefit from his knowledge and skills in pushing companies forward. Back to the topic at hand....



BP has been with be since the very start back in spring 2012. Since my very first investment I have made three additional increases when the share price have dropped or in this case because I see a shift in the wind. BP has a fairly large stake in Rosneft and since it was bought it has not contributed with much in terms of earnings which was due to the strong decrease in the oil price but also the entire Russian economy came to a halt.

The Russian economy is, by the look of it, picking up again and my Russian index fund is up nicely at the moment and Avtovaz also jumped up like crazy. I actually missed a sales moment there... sigh... Anyway... oil price is higher, Rosneft will do better and the share price has been punished now for too long for BP.

If I am wrong, as I have been for the five years I have held on to them, then I will at least collect a nice dividend and I have no issues with that.

I bought an additional 420 shares which set me back, including fees, for 2,238 €. I hold this stock in my British stock portfolio and I realise the annoyance of being forced to pay a stamp duty here in the UK.


Commerzbank, logo, 2017

The ETF Portugal has remained at a very low level for a long time now. I took a look at unemployment rate that is now down at around 10%! Their GDP is also increasing year after year after year. It is not possible that the Portuguese economy and population is doing so well today while the companies and the stock index is not. There will one day be a correlation and I think that is more likely to happen sooner than later.

I therefore decided to double my investment in the Portuguese PSI20 by doubling my holding. I bought an additional 370 parts at a total cost of 1997.65 € including fees. I have only had this investment since spring 2016 so it is not very old.

Any changes will be brought into the stock portfolio upon the next update in the very end of the month.

Stocks sold February 2017: Eniro, Gerry Weber and Kernel

Eniro, logo, 2017

I wanted to keep Eniro until the very bitter end. Not because I believe they can turn anything around but simply as a monthly reminder of how poor the decision was to invest in them. To buy into a company where the CEO has been arrested for not running things with the company properly is not a good idea. To take a current event example then that would be to buy into Samsung now. Every company everywhere will have a couple of crooks employed. Once the authorities start to seriously look into a company or person for that matter then you will always be able to find something. It does not please me to say so but I honestly believe that to be true.

Eniro had a crook CEO. The CEO that took after was, by the look of things, not better. The person running the show now I neither know or care what or who he is. Key employees will have left the company and what is left is a call center in Poland.

With Eniro I additionally learnt to take a look at the goodwill. If your goodwill is higher than your equity and your tangible assets are non existing all the while having a large debt... well... that will not end very well and it did not.

Due to tax reasons I decided to walk a separate road compared to Eniro and I sold all my 850 shares, that I had paid 1035 € to acquire, for 13.60 €. There were some fees but I think I got some slack because they only reached the value of 13.60 € which means that I received zero € out for that sale. Due to that I once sold share rights for 74.50 € this "investment" did not become a -100% loss but merely a -93% loss. Eniro became, in the end, a 31 months holding.


Gerry Weber, Logo, 2017

The reason for why Gerry Weber ended up in my visual field at all was due to insider trading. The new CEO, the son of one of the founders, was each month buying shares after shares after shares. He did that when the share price was up at over 30 € so when it dropped down to around 20 € I started to look upon it as being an interesting investment. The new CEO kept buying shares. Not that long afterwards the price dropped further down to around 15 € before it started to settle around 10 to 12 €. All of a sudden the CEO was not buying any more shares.

In the article that I wrote when I bought the shares I was already then annoyed with myself because I never ever saw any customers in the store. Never. It was therefore a kind of anti-Lynch company where the books looked ok however a company without any customers will only end up at one location in the end. The bin!

I have too many companies and far too many within retail that removing one while having a tax benefit from doing so felt pretty ok. Gerry Weber you are out! and for the future of the company I hope that Ralf Weber will pretty soon also be out!

I sold my 50 shares including the removal of fees for 509 € which gives me a loss of 530 €. I received a tiny dividend in the size of 20 € which gives me a loss of -49%. Gerry Weber stayed with me for 28 months more than what they should have stayed.


Kernel, logo, 2017

Kernel was a pure low P/E, P/B and looking into a war zone where very often share prices of companies drops like stones even though they are still able to continue their business. Sometimes they are even able to perform better during such situations so it was a classical contrarian company. When I look back at the reason for why I bought it then there was not that many. I had tried to buy another one but ended up with this one... was more or less the reason for the buy. In war zones everything drops so maybe no other reason is actually needed.

I ended up buying more shares in Kernel on four different occasions which came from that the share price kept dropping and back then I had my "auto" rule of buying more shares when the drop went passed certain borders.

After a couple of years the share price started to increase and I was sitting around with a Ukrainian agricultural company, in a war zone, having plenty of business with Russia in the size of 10% of my entire stock portfolio. I then decided to decrease the holding and I sold off a large part of my shares at a profit of 35%. I now decided to sell off the rest of this holding because there were several things in the latest report that I have not been so happy with.

They are playing around a lot with the valuation of the crops on the fields and not only in storage. The have hired a person for hedging. The dollar is very strong and all crops are traded in dollars so their profits are inflated due to this... all the while they are unable to increase their revenue flow since many, many years now. An insider, it must have been the founder and CEO, sold off larger portions of shares during the end January. For me that was enough and I decided it was time to leave.

I sold my remaining 170 shares for 2864 € with a 92% gain. Looking at the entire Kernel investment then I made a profit of 2518 € and I received almost 160 € in dividends giving me a profit of 56% during the 45 months that I remained as a shareholder in Kernel.

My average holding time of my departed shares are now up at 29 months.

Any changes will be brought into the stock portfolio upon the next update in the very end of the month.

Analysis of Kernel 2016



Company: Kernel

ISIN LU0327357389 | WKN A0M7QF

Business: An Ukrainian agricultural and logistics company with its headquarters in Luxembourg. They have six different business units: Sunflower Oil in Bulk (buy sunflower seeds and crush them to oil), Bottled Oil (sold under the brand names: Schedry Dar, Stozhar and Chumak Zolota), Farming (producing all kind of crops with the new thing being rapeseed), Grain (logistic handling of bought crops), Export Terminals (export of the grain and oil via harbours) and Silo Services (storage and drying of crops before export and sale).  

Active: Agricultural production in Ukraine and Russia. The products are exported and sold all over the world according to world market prices.

P/E: 7.9

Here you can find the previous analysis of Kernel 2015.


The P/E for Kernel is excellent with 6.7 and the P/B is good with 1.5 which gives a very clear buy signal from Graham. The earnings to sales are good at 11% and the ROE is excellent with over 22%. The book to debt ratio is looking great with 1.9.
In the last five years they have had a negative growth rate of -1.6% which is very bad and this then gives us a motivated P/E of around 8 to 10 which means that Kernel is pretty close to being fairly valued by the market.
They pay out a silly low dividend in the size of 1.4% which correspond to not even 10% of their earnings which is very low.

Conclusion: Graham says yes to Kernel but I do not. Yes, all the values are looking good but I find that the values are doped due to USD valuation and, in my opinion, different valuation of biological assets. I am still shareholder but I am very uncertain for how long.

Kernel annual report 2016


Kernel, 2016, front page

There has been some major share price movements in Kernel lately since the Polish retirements funds and what have you seem to have discovered Kernel. These are the moments when you regret that you sold off parts of the company but even so I must keep my head on straight and realise the risk of owning companies that are pretty much operating in a war zone. 

The report in full can be found here and all material is taken from it. For the previous annual report please see Kernel annual report 2015 and to find out more concerning Kernel please visit analysis of Kernel 2015.

The revenue dropped dramatically, from my point of view, however the earnings are in the end very decent due to increased dollar valuation in which they sell many of their crops while many of their costs are in Ukraine Hryvnia.


Kernel, 2016, financial statement

There are some annoying question marks in the company... Compared to 2015 they significantly increased the valuation of their crops. To my knowledge the valuation of many crops have not increased significantly from July 2015 to July 2016 so why do they decide to push up the valuation of that? Yes, their costs to recover those assets will be less... I can agree on that but that should not influence the value of the biological asset.
They have have give them selves stock options in the size of 3.8% of the total shares. Is the CEO and founder planning to retake the company via stock options to himself?
They have now hired a BA guy that will most likely fool around with currency and crops hedging. I do not really see how that will end well.

Conclusion: Kernel is doing well on the paper which to a very large extent comes a very strong dollar and crops having world market prices in USD. The managers seems to want to create a cosy little environment for themselves and the amount of stock options are, in my opinion an outrage. This is a company that pretends to make money and it is not a little start-up that needs to tie extremely skilled people to them via the hand out of shares because the salaries are so bad. For this reason I am currently cautious. I will remain shareholder for now but it might change quickly.