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Meet our Co-founder
You most probably know us as ‘a team of two stock investors at their early 30s’. Today you will meet one of our team members, namely, Adamos Hadjiantoniou - Senior Equity Analyst and Co-Founder at StockOpine.
On 1st of April, Adamos was interviewed by Lenka Roz Schanova of Strike.Market and we decided to reproduce the interview for our subscribers. The interview was originally published here. Hope you will enjoy it!!
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Tell us a little bit about your background.
I graduated from the London School of Economics and Political Science (LSE) in 2014 with a degree in Accounting and Finance whereas in March 2018, I joined membership of the Institute of Chartered Accountants in England and Wales (ICAEW). Since October 2019, I am also a member of the CFA Institute and I currently serve as a Treasurer of the CFA Society of Cyprus.
I started my career at Deloitte Cyprus in 2014 as a Consultant and was later promoted to an Assistant Manager in the Financial Advisory Services department of the company. In February 2019, I joined the real estate unit of Alpha Bank Cyprus as the Head of the Review and Analysis team, while from September 2019 I worked as a Financial Analyst in the Strategy, Planning and Development department of Logicom Public Ltd. During September 2020 until June 2022, I was employed by Demetra Holdings Plc as the Chief Operating Officer and held Board positions in Demetra Holdings Plc and in the desalination companies in which Demetra Holdings Plc is a shareholder. Currently, my full time job is my passion which is analyzing and investing in stocks, working as a Senior Equity Analyst at StockOpine which I cofounded.
How long have you been investing in stocks?
I have been investing in stocks since my graduation in 2014. Reading investment books such as One Up on Wall Street by Peter Lynch, Common Stocks and Uncommon Profits by Philip A. Fisher and The Zulu Principle of Jim Slater sparked my interest in stocks. I should admit that I have changed a lot as an investor and how I evaluate companies but what remains the same is the long term thinking and holding horizon.
What has been your most successful investment to date?
I will start with a cliché: Education. In all seriousness, education experience gives you the opportunity to meet people across different cultures and broaden your horizons. Living in a country with a population close to 1 million and then moving to a city (London) with a population close to 9 million was an eye-opener.
Beyond that, I would choose the addition to the position on Meta Platforms in November 2022 when price fell below $100. Over 100% returns in such a short horizon was unexpected but this demonstrates that the market is not always rational since human psychology is part of the game. This leads to mispricing opportunities that need to be uncovered.
What is your investment philosophy and approach? Can you describe more in depth your principles?
In line with StockOpine’s philosophy and approach, I describe myself as a long-term investor looking for businesses with sustainable competitive advantages. Stocks come under our radar either through screening (usual metrics include returns on equity, profitability and valuation multiples), through discussions with other market participants and through social media (mainly Commonstock and Twitter). We effectively follow a bottom-up approach.
Thereafter, we perform fundamental analysis to identify stocks that shall display among others the following attributes,
a) Leaders in their industries or disruptors with superior business model,
b) Wide moat allowing them to retain margins and market position and
c) Strong financials.
If we are convinced that a company possesses the above attributes and can maintain its position in the market we evaluate whether the price meets our hurdle rate. If it does, we initiate a position.
It is worth clarifying that a bottom-up approach does not imply that we ignore macroeconomic parameters. On the contrary, the macro environment does affect the forecasts and consequently the valuation of a stock.
What types of stocks do you typically invest in? Large-cap, mid-cap, small-cap, growth, value, and why?
Luckily enough, retail investors do not have these ‘policy’ / ‘strategy’ limitations. We look for leaders and a leader can be a large-cap stock but it can also be a mid-cap stock, depending on the size of the industry it is operating. Valuation does play a role in the final decision and although value is subjective, it is a key determinant of future returns. We do not look for deep value discounts when a company is a leader with clear competitive advantages but if there is such opportunity (rarely) the buying decision is easy.
What is your strategy for portfolio diversification?
Although we may take a sizable position in a single stock, if our analysis led us to conclude that the company will be a winner, we try to limit industry exposures in order to keep the risk at lower and sustainable levels. This approach provides us with enough time to continuously evaluate stocks and industries so as to fine tune our portfolio. After all, we are here for the long term.
Have you ever experienced significant losses in your portfolio, and how did you manage them?
Given that StockOpine started 15 months ago, I will focus on a personal investment decision. That is Ericsson (ERIC) which I started investing back in mid-2020. Initially, it appeared a great investment as its 5G leadership position was ‘bound’ to make the company succeed. Shortly after, the Iraq Scandal came into surface and ever since the stock has crushed and I am sitting on a loss of around 50%. I could have sold (I will eventually do so) and this should have been the right decision given that I could deploy the capital elsewhere. At least, the shareholders recently voted against discharging the CEO and other board members from liability (2nd year in a row) adding pressure to leadership to properly exercise its fiduciary duties which can help in recouping some of the stock price losses.
How has your portfolio performed over the last year?
During 2022, the portfolio that is solely based on the analysis we provide on StockOpine Newsletter generated a negative return of 9.5% whereas the year to date return stands at a +15%. This is a short horizon to assess the performance objectively but given that we outperformed the market, it gives us confidence that our strategy works.
What is your best-performing stock in your portfolio, and why do you think it has performed so well?
Greggs (GRG.L) with a return of 58%. One reason of this performance was the entry point at the time of purchase where we concluded that the stock was undervalued. Shortly after, it dropped even more giving us an opportunity to add to our position.
Greggs is a modern vertically integrated UK food-on-the-go retailer, providing a wide menu of food and drink choices and it is best known for its sausage roll. It operates through 2,328 shops (as of 31 December 2022) and plans to expand its estate to +3,000 by 2026. Its value proposition of freshly prepared food at affordable prices makes Greggs a top choice for consumers which will help the company navigate this challenging macroeconomic environment.
What is your worst-performing stock in your portfolio?
PayPal Holdings with a negative return of 43%. The key drivers of the decline were the consecutive downward revisions on revenue forecasts, the declining profitability and the withdrawal of the 750 million active account target. The good news is that the prior CFO left the company whereas PayPal in Q4’22 depicted margin improvements as a result of its cost restructuring program.
Have you made any significant changes to your portfolio recently, and how have these changes impacted your portfolio performance?
The portfolio is 15 months old so nothing material changed.
What are the top 3 biggest stocks in your portfolio?
In your newsletter Stock Opine you wrote about Skyline Champion Corporation. Can you give us some details and insights about this stock?
Skyline Champion Corporation offers a leading portfolio of manufactured and modular homes, park model RVs, accessory dwelling units (“ADUs”) and modular buildings for the multi-family and hospitality sectors and is considered the second largest player in the industry. The largest player in the industry is Clayton, a subsidiary of Berkshire Hathaway.
Skyline has a Trailing Twelve Month revenue of c. $2.7 billion, depicting a revenue compound annual growth rate of 19% since FY15 while its market share grew from 17% in FY19 to 20.4%. Its TTM operating income stands at $566 million translating to a margin of 21%. It has a strong balance sheet position with cash and cash equivalents of $712 million compared to long-term debt amounting to $12 million.
I believe that under the current high interest rate environment manufactured homes provide an affordable option to consumers whereas the technical and aesthetic improvements in design will attract more potential home buyers.
Michal Semotan has recently written about ABNB analysis. What is your opinion on ABNB?
Airbnb is part of our portfolio and my opinion is clearly positive. It has a resilient business model and it is a proven cash machine with a solid balance sheet. I agree with Michal Semotan that China reopening will be a flywheel for the company while the new ‘necessity’ to travel is more evident in the post-Covid era resulting to a strong demand for travel. The below quote from Brian Chesky, Airbnb Co-founder and CEO sums it up.
“I think part of that is like no matter what happens in the world, people want to travel. And for many people, the office is now Zoom, the Mall of now Amazon, the theater is now Netflix. Travel is going to become a very important way that people experience the world this year. And so therefore, this is going to be an exciting year for Airbnb and for traveling all around the world.”
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