Rebalancing October 14/15: Selling Qurate Retail Inc; Buying Kintetsu World Express Inc
Last week I sold my Qurate position (US, tele/online shopping, $4.1B MCap, buy date: March 23, 2021) with a -16% pre-tax total return. The stock entered 2021 with strong momentum and was (and still is) one of the cheapest high quality names in the US market. However, the momentum collapsed and the stock is in a downtrend since June. Many investors, especially on Fintwit, are loyal to the company and its stock. Nobody seems to really understand why the stock is trading like that recently (neither do I). However, I don’t judge and usually Momentum is right. If Momentum comes back, I will reinvest.
Instead I bought Kintetsu World Express Inc (Japan, logistics/shipping company, $1.7B MCap). Kintetsu World Express operates globally in air freight, sea freight, and logistics operations. The majority of revenue is generated from supply-chain solution services through the APL Logistics subsidiary. Next largest source of revenue is the shipping/logistics business in Asia/Oceania. To give an overview, the following table shows the main ranking scores of Qurate and Kintetsu in comparison.
The name is a perfect fit for the current environment. Supply chains are a mess right now and inflation is raging. Having a good logistics partner seems to be more crucial than ever for businesses in the real world. Kintetsu is cheap, healthy, growing and has strong fundamental and technical momentum.
Value names are in favor, while Tech seems to lose steam despite raging crypto markets. My Crypto/MultifactorEquity barbell never had a better time to shine. Let’s see what happens next.
Yours sincerely,
Non-Prophet