The harsh global folio!

Global markets have turned very jittery in the past month and I have been finally able to deploy some capital and reduce cash position.

1. Increased position size in British American Tobacco to 5% (from 2% earlier). Its just ridiculous the kind of dividend yield this company is trading at. I find it very very hard to believe that there is any chance of capital erosion in this scrip.

2. Increased position size in InMode to 5% (from 2% earlier). Since 2019, there have been 4 instances when their valuations came below 4x EV/sales. I have been a buyer at last 2 occasions. Company continues to grow at healthy 20% CAGR and is trading at 14x PE and 18x price/freecashflow. I think its a good opportunity to increase position size here.

3. Added 2% position in Fever tree drinks PLC. Fever tree created the mixer drink market with 50% market share in UK. They have foreyed into US recently, where the opportunity size is much larger. In recent times, their margins got hit as glass prices increased a lot and they didn’t pass on price increase as their focus has been on increasing market share. I feel this margin wobble is a temporary issue and company should prioritize market share gains. In terms of valuations, they are trading towards the lower end. On a personal note, I love their mixer drinks!

4. Added 2% position in Diageo. Diageo has been a market leader in whiskey and scotch for a very long time, currently they are trading at lower end of their valuations, which gives an opportunity to add shares.

5. Added 2% position size in Grupo Aeroportr dl Pcfco SAB de CV. They operate multiple airports in Mexico and have grown tremendously in past few year. I will let the pictures summarize their growth story.

In terms of valuations, they are trading at lower end of their EV/EBITDA range, at 14x PE and 5%+ dividend yield, which I find quite reasonable for their growth profile. Its also a great way to play the Mexican growth story.

6. Reduced position size in Vanguard emerging market ETF (from 10% to 5%), Swiss market ETF (from 5% to 2%), and in VF Corp (from 2% to 1%). I am reducing position sizes in ETF as I feel buying shares in cos can give much higher returns. Drop in VF Corp position is due to drop in stock price, its been in a crazy fall since the last year!

Updated cash is around 8% and I am looking to deploy this soon.