Today I will show you my historical investments on the Warsaw Stock Exchange – the transactions on the shares of a company COCCODRILLO (CDL). I had shares of this company in my private financial wallet but the company was not present in the WSE wallet – see link The Warsaw Stock Exchange Freedom Portfolio.
Coccodrillo is a Polish clothing company which designs, produces and distributes clothes for children from infants to 14-year olds.
Information below about company’s expansion are taken from website http://cdrl.pl/
“The number of stores in Poland exceeds 220 outlets. The company exports clothes to the countries of Central and Eastern Europe: Belarus, Russia, Ukraine, Lithuania, Latvia, Estonia, Romania, Bulgaria, Hungary, Czech Republic and Slovakia. In the course of time, the portfolio of foreign partners was enriched with the next countries such as Germany, Austria, Portugal, Cyprus, Armenia, Azerbaijan, Turkmenistan, Saudi Arabia, Libya, Egypt, Oman, Kazakhstan, Mongolia, China, Sri Lanka and Brazil. Currently, 78 stores with the Coccodrillo logo and 87 shops of the shop in shop model are located outside Poland.”
I did not add this company to my public WSE wallet because the moment I started running a public portfolio I had already decided that I was going to sell the shares from my real financial wallet soon. The reason was that I knew that sooner or later a high USD/PLN ratio will affect the profits of the clothing industry – such companies produce usually in Asia and pay for their production costs in USD. The company sells most of the clothes in Poland so the profit is in PLN. High currency ratio USD/PLN is not positive in such circumstances.
In my real financial wallet which now is almost the same as the WSE public wallet, I have many shares of the companies which benefit from high USD/PLN ratio – to know the composition of the wallet, read The Warsaw Stock Exchange Freedom Portfolio.
I sold the shares before publishing the financial results for the II quarter. As I forecasted, a high ratio USD/PLN affected the financial results. Operational profit and net profit went down in the last quarter. The reaction of the investors is what we see on the chart below (3 black candlesticks) – see the chart at the beginning of this post.
At the moment of buying the company to my financial wallet, P/E ratio was less than 9, P/S ratio was 0.6. The company was cheap in comparison to what profit it generated. It was a good decision. The financial results showed increasing profits and price of the shares went up.
An approximate date of buying was 19.10.2015. and an approximate date of selling was 27.06.2016.
As you see from the table below, the profit was +72.25% (+69.76% without a dividend) for about 8 months and a week.
My wallet went up +23.00% since the time of selling the shares. The shares of COCCODRILLO went down about -3.5%. The timing of that transaction was very good and now I benefit from other companies’ shares which were bought instead of this company.