Some purchases of Swiss securities in November 2013: Too expensive or not?

[Pat Jac]

Good morning,

 

In the coming days, I am considering investing (on behalf of my wife) in Swiss stocks, with the aim of diversifying the portfolio. So I looked at a few stocks that Jérôme presented an analysis of, generally done in 2011. My question is not whether these stocks are interesting: they are interesting from a diversification, security, alternative perspective against dollar fluctuations, buy and hold…

But my question is whether they are not too expensive today, November 8, 2013, because when you look at the price variations on Boursorama over the last year or three years, there is enough to make you shudder...

I would like to point out that they will be held for 15 years, barring any major management accidents, which would be very surprising.

 

Here is my selection and what I think about it, please tell me if you agree, and what would be your position today relative to a purchase. I also specify that this is not the main part of the portfolio under construction, which will be composed of the large American or Swiss values well known on this forum.

a) Bell (Swiss meat): the title has increased a lot since 2011, + 43 % in 1 year!

b) Emmi (Swiss milk): + 10% for 1 year, 60% for 3 years….

c) Jungfraubahn holding (cable car in the Bernese Oberland): Oh, I like this stock! Which is a mistake for a novice investor (Graham)! But hey, it has not increased much.

d) Pax Antage (Construction): no liquidity, entry ticket at more than 2000 CHF per share…

Otherwise, there will be Roche, Nestlé, Zurich Assurances, maybe Swatch….but there I am not too worried…

I'm open to all your advice, including obviously on other titles, I have no pretensions...

THANKS

 

 

[Harmony Management]

Good evening, my answer will not focus on "too expensive or not". There are indeed some very good companies in Switzerland. But, as you are apparently a French investor and therefore subject to French taxation I suppose, you should know that there is a withholding tax on dividends from Swiss shares of 35% and that the tax credit is only 17.7% if I am not mistaken. If you add to that, after a deduction of 40% it is true, the taxation of dividends if you are in the high tax brackets, unfortunately you will not have much left. This is why I prefer to invest in US or British companies for example. What is your opinion?

[Jerome]

Hi Pat

here are my answers

 

a) Bell (Swiss meat): the title has increased a lot since 2011, + 43 % in 1 year!

yes, but the fundamentals followed. I really like this defensive value with a dominant position in Switzerland. And then the meat…mmmhhhh there’s nothing like it. Just a shame that the grilling season is behind us

b) Emmi (Swiss milk): + 10% for 1 year, 60% for 3 years….

also a nice defensive value with a dominant position, but it's true that the prices got a little too excited there... besides it's been correcting a little downwards for some time... to watch to possibly take advantage of it 

c) Jungfraubahn holding (cable car in the Bernese Oberland): Oh, I like this stock! Which is a mistake for a novice investor (Graham)! But hey, it has not increased much.

Indeed it is a title that has everything to please, a majestic place with above all a sacred monopoly of situation

the title is still quite interesting from the point of view of its valuation, with a low beta, therefore interesting when the market is high...

d) Pax Antage (Construction): no liquidity, entry ticket at more than 2000 CHF per share…

Not very liquid, certainly, but also not very volatile and not very influenced by the market... nothing to do a priori with JFN, but quite similar in its behavior. The title is not expensive either, even if you have to pay CHF 1000 for a share (and not 2000). I like this title which diversifies my portfolio well.

Otherwise, there will be Roche, Nestlé, Zurich Assurances, maybe Swatch….but there I am not too worried…

My favorites here are Zurich and Nestlé, to which I also add Swisscom… these are three stocks that I am monitoring for a future purchase

[Pat Jac]

Good evening,

you are absolutely right, French taxation is a real problem. That said, the purchase of Swiss securities meets a diversification objective on the one hand and on the other hand I have hope: the UBS that just interviewed my wife has just informed her that for cross-border workers, the 35 percent levy would soon no longer be practical and that in return, the gross would be fully taxable in France.

I would like to point out that I was not present at the interview and that I am awaiting confirmation.

This does not call into question the predominance of US values (expensive...) in the portfolio. And as said above, I am currently thinking about it. Our TMI in France will increase to 41 %...

 

 

 

 

 

 

[Pat Jac]

Thank you both for your answers, it's nice of you to answer me so quickly!

 Have a nice weekend.

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