Hi all. As you may have seen, I did not publish anything last week with the exception of my weekly compilation of recommended articles for investors. The reason for this brief drought of articles has been an express trip that I have made through Madrid. I took advantage of the visit to meet in person some of the most important value managers in Spain and a value blogger that many of you know. In the first part of the 3 articles that I will write about my “value trip” through Madrid I will tell you about my visit to Metagestión.
The visit to Metagestión
The first visit of my "value trip" through Madrid was on Tuesday 27 at 13:00 pm, at the value investing.
Alejandro Martín Toledo, Javier Ruiz and Miguel Rodríguez Quesada, the Metagestión team
On this visit I had the pleasure of meeting two of the fund managers, Alejandro Martín Toledo and Miguel Rodríguez Quesada. Then I will briefly comment on how was the talk we had at its headquarters.
The conversation with Alejandro and Miguel
The visit was short, but very interesting. We had the opportunity to discuss different topics in which we shared our points of view.
The first topic we talked about was the situation of the fund in general. The company has around 300 million euros under management, a very positive figure but which, in my opinion, should be much higher considering the results of the management team.
Another topic we talked about was the situation of financial education in Spain. It is true that Spanish society has evolved in this regard over time, but it is still at a considerable distance from other countries such as the United States, the United Kingdom or Switzerland.
There was also time to talk about listed companies. To give a few examples, we are talking about two positions of technology companies that they maintain in their funds and in which I have also invested, which are Microsoft and Alphabet (formerly Google). We agree in our assessment of the competitive advantages of both companies, which have bomb-proof business models. I have to say that Alphabet is one of my main positions, which I have in my portfolio since 2.009 and that has increased in value by 5 my acquisition. Instead, I sold my Microsoft stock out of doubt with their new business model, which in the end turned out to be a mistake as I sold with a 60% capital gain that could have been significantly higher.
Where we did not agree so much was in the potential and competitive advantages of Harley Davidson, where they did not share my very positive vision of the company. In my opinion, after the latest price drops, the FCF yield of more than 9% offered by its shares and its competitive advantage for its brand make the Harley Davidson a good long-term investment opportunity at these prices. I encourage you to leave your opinions about it in the comments.
Finally, we talk about a couple of more technical topics related to business valuation. I was interested in his way of calculating the discount rate on his investments and also in his method of calculating the ROCE ratio. Of the discount rate calculation I have already spoken to you, while the calculation of ROCE is a somewhat controversial issue that I promise to speak to you about in a future article.
My general impression of the visit to Metagestión
First of all, leaving aside the professional aspect, I have to say that the treatment with both Alejandro and Miguel was very pleasant. I want to thank you from here for your kindness for receiving me and sharing your opinions with me.
From a professional point of view, they seemed to me to be two managers with a very clear investment philosophy, who know the companies in which they invest well and you can tell that they are passionate about what they do. I believe that the participants of your funds can rest assured that their money is in good hands.
Finally, I would like to end this article with a phrase from Alejandro that summarizes how value investing has evolved in recent decades:
"We spend a lot of time analyzing whether each company has competitive advantages and whether they are sustainable."
This has been it for the moment. In the next article I will tell you about the second part of my “value trip” through Madrid in which I visit another of the great Spanish value managers, Bestinver.