I am a highly determined and competitive individual on a lifelong quest to compound happiness, wisdom, and wealth.I am passionate about financial markets and behavioral economics. I thoroughly enjoy researching investment ideas of my role models, such as Warren Buffett, the late Charlie Munger, Mohnish Pabrai, Li Lu, Bill Nygren, and Seth Klarman, among others.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such p ...

Core Viewpoint - LVMH has faced unexpected setbacks in its acquisition attempts within the luxury goods sector, particularly in its battles for Gucci and Hermès, highlighting the intense competition in the luxury market [1] Group 1: Acquisition Challenges - LVMH's attempts to acquire Gucci and Hermès have not been successful, marking significant challenges in its expansion strategy [1] - The luxury goods sector is characterized by fierce competition, with major players like LVMH vying for dominance [1] Group 2: Market Dynamics - The luxury market is described as a thrilling game of predator and prey, indicating the high stakes involved in acquisitions [1] - The ongoing rivalry among luxury brands suggests a complex landscape where strategic moves can lead to significant shifts in market power [1]

Core Viewpoint - The European luxury goods industry is facing significant challenges due to currency fluctuations and tariff policies, leading to a decline in stock prices for major luxury groups and a slowdown in market growth [3][4][7]. Group 1: Market Performance - Major luxury groups such as LVMH, Hermès, Richemont, and Kering have seen stock price declines of 26.31%, 17.98%, 19.84%, and 13.33% respectively over the past six months [3]. - The MSCI Europe Textile, Apparel, and Luxury Goods Total Return Index has dropped 17% year-to-date, underperforming the broader market by 27% [3]. - NDR's report indicates that the luxury goods sector's growth is slowing, partly due to the fading benefits of favorable exchange rates and the impact of U.S. tariff policies on global consumer confidence [3][4]. Group 2: Financial Results - LVMH reported a 4% decline in revenue and a 22% drop in net profit for the first half of the year, with recurring operating profit down 15% [7]. - Kering's second-quarter sales fell 15% to €3.7 billion, with Gucci's sales down 25% to €1.46 billion [7]. - Hermès experienced an 8% sales growth in the first half, significantly lower than the 15% growth reported in the previous year [7]. Group 3: Structural Challenges - The luxury goods sector is facing deeper structural challenges, including weak consumer confidence and brand value dilution, leading to a loss of approximately 50 million consumers over the past two years [11][12]. - The Z generation has seen a 7% decline in sales, equating to a loss of $5.7 billion in consumption, marking the largest drop among all generations [11]. - High-net-worth individuals are becoming more discerning in their luxury purchases, focusing on value and personalized services [11]. Group 4: Future Outlook - Bernstein has revised its global luxury goods revenue growth forecast for 2025 from an increase of 5% to a decrease of 2% [12]. - UBS estimates that luxury brands have increased prices by an average of 33% from 2019 to 2023, which may have overstretched market tolerance [12]. - Following a trade agreement between the U.S. and Europe, a 15% baseline tariff on luxury goods imported from Europe is expected to raise prices in the U.S. by an average of 2% and globally by about 1% [12].

Group 1 - The company aims to invest in firms with strong qualitative attributes, purchasing them at attractive prices based on fundamentals, and holding them indefinitely [1] - The investment strategy focuses on maintaining a concentrated portfolio to avoid underperformers while maximizing exposure to high-potential winners [1] - The company plans to publish articles on selected companies approximately three times a week, including extensive quarterly follow-ups and constant updates [1] Group 2 - The company may rate high-quality firms as 'Hold' if their growth opportunities do not meet the required threshold or if the downside risk is deemed too high [1]

Core Viewpoint - The European luxury goods sector is facing significant challenges, with major companies experiencing double-digit stock price declines over the past six months due to currency fluctuations and tariff policies [2][5]. Group 1: Stock Performance - The stock prices of the four major European luxury groups—LVMH, Hermès, Richemont, and Kering—have dropped by 26.31%, 17.98%, 19.84%, and 13.33% respectively [2]. - The MSCI Europe Textiles, Apparel & Luxury Goods Total Return Index has decreased by 17% year-to-date, underperforming the broader market by 27% [2]. Group 2: Economic Factors - The luxury goods market's growth slowdown is attributed to the fading benefits of favorable exchange rates and the impact of U.S. tariff policies on global consumer confidence [2][3]. - The euro's appreciation has pressured exports to the U.S., contributing to a weak performance in European stock markets [3]. Group 3: Company Financials - LVMH reported a 4% decline in revenue and a 22% drop in net profit for the first half of the year, with a 15% decrease in recurring operating profit [5]. - Kering's second-quarter sales fell by 15% to €3.7 billion, with Gucci's sales down 25% to €1.46 billion [6]. Group 4: Consumer Behavior - The luxury sector has lost approximately 50 million consumers over the past two years, representing one-eighth of the global high-end consumer base [8]. - The Z generation's spending decreased by 7% in 2024, equating to a loss of $5.7 billion, marking the largest decline among all age groups [8]. Group 5: Future Outlook - Bernstein has revised its growth forecast for the luxury goods industry, projecting a 2% decline in global luxury revenue by 2025, down from a previous estimate of 5% growth [9]. - UBS estimates that luxury prices have increased by an average of 33% from 2019 to 2023, with new tariffs potentially raising prices in the U.S. by an average of 2% [10].

Core Insights - Hermes Building Services is positioning proactive commercial property maintenance as a strategic driver of asset value and operational efficiency, shifting the perception of maintenance from a cost center to a business advantage [1][2] - The commercial facility maintenance sector in North America is projected to grow from a market value of $153.6 billion in 2023 to $202.41 billion by 2030, indicating a trend where facility upkeep is increasingly viewed as a competitive differentiator in real estate portfolios [2] Company Overview - Hermes Building Services provides full-service building care, including HVAC, janitorial, electrical, plumbing, and landscaping services, and serves over 1,000 clients across the Mid-Atlantic and Southeastern U.S. [4] - The company emphasizes preventive care and early issue detection through analytics and structured scheduling, which helps clients avoid major breakdowns and improve tenant satisfaction [3] Strategic Focus - The company aims to extend the life of assets, reduce unplanned costs, and enhance building performance through data-backed maintenance programs [2][3] - The shift in focus from good maintenance to great maintenance is intended to protect the bottom line for clients [3]

Group 1: Financial Performance - Hermès reported a 9% sales growth in Q2, reaching €3.9 billion, with all regions showing growth [15] - Adidas achieved a 7.3% increase in net sales to €12.1 billion, with a significant 70% rise in operating profit to €1.2 billion [2] - Prada's net revenue for H1 reached €2.74 billion, reflecting a 9.1% growth at constant exchange rates [3] - Canada Goose experienced a robust start to the fiscal year with a 22.4% increase in global revenue to CAD 107.8 million [10] - L'Oréal's sales for H1 were €22.47 billion, with a 1.6% growth, and an operating profit margin of 21.1% [9] - SMCP reported a 2.7% increase in sales to €601.1 million, with growth in all regions except Asia [11] Group 2: Management Changes - Kering appointed Luca de Meo as CEO, offering a €20 million signing bonus, which positively impacted the stock price [4] - PUMA appointed Andreas Hubert as COO, aiming to streamline operations by integrating various functions [8] - Arena announced Mark Pinger as the new Chief Brand Officer, effective October 1, 2025 [8] - Jil Sander's CEO Serge Brunschwig resigned after six months in the position [14] Group 3: Brand and Market Insights - The performance of Prada's main brand declined by 1.9%, while Miu Miu surged by 49.2%, indicating a divergence in brand performance [3] - Hermès' leather goods sales grew by 14.8%, while the watch segment faced challenges with a 5.5% decline [15][16] - L'Oréal's digital transformation efforts are beginning to show results, with a growth acceleration from Q1 to Q2 [9] - The luxury market is showing resilience, with brands like Canada Goose capitalizing on strong demand [10]

The shares of LVMH, Louis Vuitton's parent company, are down 15% since the start of 2025. Getty Images The luxury industry is on the verge of a necessary reset. LVMH's profits dropped 15% in the first half of 2025, with organic growth down 3%, and nearly all divisions reported flat or negative performance. As for Gucci-owned luxury group Kering, this year has been even worse: revenue is down 18% for Q2 with Gucci's sales plummeting by 25% and overall sales in Asia and Japan down as much as 29% in the first ...

Core Viewpoint - BJ's Wholesale Club (BJ) is currently positioned as a more attractive investment option compared to Hermes International SA - Unsponsored ADR (HESAY) based on various valuation metrics and earnings estimate revisions [3][7]. Valuation Metrics - BJ has a forward P/E ratio of 24.99, while HESAY has a significantly higher forward P/E of 56.63 [5]. - The PEG ratio for BJ is 2.97, indicating a more favorable earnings growth outlook compared to HESAY's PEG ratio of 7.52 [5]. - BJ's P/B ratio stands at 7.2, which is lower than HESAY's P/B ratio of 15.87, suggesting that BJ is more undervalued relative to its book value [6]. Earnings Estimates - BJ has a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while HESAY holds a Zacks Rank of 3 (Hold) [3]. - The stronger estimate revision activity for BJ suggests an improving earnings outlook compared to HESAY [7]. Value Grades - BJ has been assigned a Value grade of B, reflecting its attractive valuation metrics, whereas HESAY has received a Value grade of F [6].

Company Insights - Hermes Building Services emphasizes the strategic importance of proactive maintenance in enhancing the value of real estate assets, viewing it as a critical investment for property longevity and performance [1][2] - The company offers a comprehensive suite of services including janitorial, HVAC, plumbing, electrical, and landscaping maintenance, focusing on early detection of potential issues to reduce downtime and extend the lifespan of building systems [3][7] - Clients of Hermes Building Services experience improved tenant satisfaction, reduced operational disruptions, and enhanced property valuations through regular maintenance investments [4] Industry Overview - The North American commercial facility maintenance market was valued at approximately $153.6 billion in 2023 and is projected to grow to $202.41 billion by 2030, reflecting a compound annual growth rate (CAGR) of 4.1%, indicating a growing recognition of maintenance services as essential in property management strategies [2]