Scherzer & Co (PZS) invests its funds mainly in domestic equities. PZS looks for companies that are unknown or unloved, and special situations. The focus is on special situations, where the downside is perceived to be limited. In addition, it acquires value stocks, mainly below book value. These stocks need to demonstrate strong business models.
Scherzer & Co’s (PZS) NAV declined by 12.6% in FY18 and a further 1.3% in Q119. The company increased its income from dividends and writing options, but significant write-offs in the portfolio and a relatively high tax burden resulted in negative EPS of €0.03. Consequently, the company will not pay a dividend, compared to a DPS of €0.10 paid from FY17 profits. PZS’s portfolio of extra compensatory claims (ECS) increased to €103.8m (€116m including Allerthal-Werke and RM Rheiner Management) in FY18, mainly due to the addition of €8.4m attributable to PZS’s stake in Oldenburgische Landesbank.