Thanks for the write-up! One thing I’d challenge, is the discount to NAV. It doesn’t seem particularly meaningful if the core holding CFT was valued closer to peers like TP ICAP. My sense is that CFT’s premium multiple is at least partly driven by Viel’s significant ownership stake. That raises two questions for me: what justifies CFT high multiple relative to peers? And shouldn’t the holding company structure itself warrant a discount? I’m also wondering whether capital allocation at the group level has truly been efficient in recent years.
While TP ICAP is cheaper, their other peer BGC is much more expensive. Furthermore, CFT has had much stronger growth over the last few years at low double digits vs single digits for ICAP. The holding company structure probably does warrant some discount, but this is a very large discount. Considering their strong ROE and strong long term performance I think it's hard to critique the capital allication too much.
Hello good Sir, thanks for the pitch. The stock has come back down a lot since your pitch and the release of their results. Has your view changed at all?
Yeah the results were a little underwhelming. But I don’t think it changes much on the thesis. It’s sold off with the war but I actually think it should be a beneficiary of all the macro stuff going on. Its competitors are actually up, and its subsidiary CFT is only down like 4%, so I think it’s just a liquidity tax.
Are you sure about the following stats you mention?
According to yahoo finance the company has had a total return CAGR of 24% over the past 35 years.
I've got mine from TIKR, though it's only going back 29 years so Yahoo is probably more accurate.
Thanks for the write-up! One thing I’d challenge, is the discount to NAV. It doesn’t seem particularly meaningful if the core holding CFT was valued closer to peers like TP ICAP. My sense is that CFT’s premium multiple is at least partly driven by Viel’s significant ownership stake. That raises two questions for me: what justifies CFT high multiple relative to peers? And shouldn’t the holding company structure itself warrant a discount? I’m also wondering whether capital allocation at the group level has truly been efficient in recent years.
While TP ICAP is cheaper, their other peer BGC is much more expensive. Furthermore, CFT has had much stronger growth over the last few years at low double digits vs single digits for ICAP. The holding company structure probably does warrant some discount, but this is a very large discount. Considering their strong ROE and strong long term performance I think it's hard to critique the capital allication too much.
Hello good Sir, thanks for the pitch. The stock has come back down a lot since your pitch and the release of their results. Has your view changed at all?
Yeah the results were a little underwhelming. But I don’t think it changes much on the thesis. It’s sold off with the war but I actually think it should be a beneficiary of all the macro stuff going on. Its competitors are actually up, and its subsidiary CFT is only down like 4%, so I think it’s just a liquidity tax.