Small and midcaps: Portzamparc’s convictions for the second half


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At the beginning of July, the analysis office presented its list of convictions for the second half of the year. Not to be confused with the “High Five”, the selection of 5 values ​​updated every month, this list is updated every six months. The opportunity to see the stocks that convinced Portzamparc of their medium-term potential. Detail review.

Portzamparc begins the presentation of this list with an implacable observation: the period remains complicated for the class of assets that constitute small and medium caps. In a context of great uncertainty, investors have abandoned the sector, which is reflected in particular by reduced liquidity since the spring, “especially on the CAC Small” explains the analysis office.

Portzamparc takes the opportunity to take stock of the introductions to the first half. Unsurprisingly, transactions were less numerous than the previous year, but around ten companies entered the market (Icape, Lhyfe, Smaio, etc.) with, for the moment, rather mixed performances.

Portzamparc’s convictions in H1 held up well

In the first half of the year, the list of convictions of the research office held up better than the CAC Mid&Small, falling only 9.7% when the index gave up 14.7% (data as of July 6). In this list, we found, in descending order of performance: Groupe Gorgé (+31.2%), GTT, Eramet, Clasquin, Spie, SII, Lisi, Fountaine Pajot, Dontnod, Kalray and Metabolic Explorer (-50.4% ).

For the second half, Portzamparc has decided to renew some of these players: it retains Eramet, Lisi, Fountaine Pajot and Kalray and decides to add Esker, Carmat, Ipsos and Lumibird.

Regarding these new recruits, Porzamparc is buying on Esker with a target price of 191 euros. He believes that the fundamentals of the software publisher remain solid and that the current valuation finally offers an entry point while the price has been divided by three since the highest.

Regarding Carmat, the price target is 31.70 euros while the medical need remains very high (150,000 hearts per year in Europe and the United States) for the integral heart prosthesis developed by medtech. Portzamparc points to “excellent feedback from clinicians on the first sales”. Be careful however, the resumption of implantations in the fourth quarter is subject to a green light from the certifying bodies, while the production quality of the prosthesis remains the biggest challenge for the group to master.

Lumibird not very sensitive to the current context

The target price for Ipsos is 60.80 euros. The 2022-2025 strategic plan is considered convincing with an expected acceleration in organic growth and a structural increase in margins (an operating margin of more than 13% is expected in 2025) from the study-by-survey specialist. Portzamparc sees many growth drivers both geographically (United States) and sectoral (TMT, health, public sector). Beware, however, of the context of wage inflation and the “possible slowdown in mass consumption in a degraded economic context.

Read also / Lumibird, the French (Breton) laser

Last entry on this list of beliefs: Lumibird. The laser specialist is hardly penalized by the current context, it has moreover confirmed its 2023 forecasts and its valuation is reasonable. Enough to justify a target price of 24 euros. The office explains in particular that the value is traded at 15.8 times the enterprise value / expected 2022 operating profit ratio (EV / Ebit), against 18 times on average. Above all, in the sector, NKT Photonics, less profitable, was bought at 30 times its EV/Ebit ratio by the Japanese Hammmatsu.

How will this list behave for the second half? The future will tell, Portzamparc will in any case take stock next December.

Laurent Grassin ([email protected])

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