Louis Vuitton and friends are en vogue! (ISIN: FR0000121014 WKN: 853292)

litshit69 (54)in Project HOPE • 4 years ago (edited)

I know I have not been able to introduce companies to you in the last few months because I am working and studying full time, but I have not been idle I have been trying to understand how to evaluate companies. A good method is shown by Univ.-Prof. Dr. Dr. Andreas Löffler from the Freie University of Berlin, Germany. (Book: Stochastic Discounted Cash Flow https://www.springer.com/de/book/9783030370800). The method is quite complex, but I am currently trying to learn it.

Many of you probably know the luxury clothing brand of Louis Vuitton or the champagne Moët & Chandon. When I started looking into stocks, I noticed how big these individual brands are positioned by merging into a conglomerate.

History
The LVMH company as we know it today has not been around as long as some of its products. In 1987 Louis Vuitton and Moët Hennessy merged, we can see Louis Vuitton as a suitcase and bag producer, Moët as a champagne producer and Hennessy as a cognac producer. Of these, Louis Vuitton is the youngest brand (1854). Moët (1743) and Hennessy (1765), on the other hand, have been in business a bit longer.
Until the end of the 20th century, apart from the cooperation with Guinness and the coming and going of new board members, no interesting events happened. To this end, LVMH expanded its perfume business through the brand "Dior" sales opportunities with the perfume chain "Sephora".
The last major acquisition is the takeover of the jeweler "Tiffany".

Brands of LVMH
I would like to name you various brands and that deliberately without telling you in which industry, which product is, because you will definitely recognize a few brands.

Moët & Chandon
Dom Perignon
Veuve Clicquot
Hennessy
Belvedere
Cloudy Bay
Fendi

Glenmorangie
Louis Vuitton (surprise, lol)
Marc Jacobs
Dior
Bvlgari
Hublot
Belmond

Peers
Peers are important in that they help determine a fair industry price.

Kering
Prada
Compagnie Financière Richemont

Personally, I don't see the rising debt of LVMH as a problem, as it arose from the acquisition of the US brand "Tiffany". The incorporation will take some time, but I am confident that LVMH will grow it into a profitable business.

In itself, Louis Vuitton is a good buy with its high dividend and strong growth. With the high share price, a savings plan would also be worthwhile. Even if the price is high, as long as the trend is intact I would dare to buy.
Why did LVMH do so well during the Covid 19 crisis? It is quite obvious since LVMH sells luxury goods.
From personal experience, I can say that it was not LVMH's customers who lost their jobs, but students like, for example, because movie theaters were closed. So LVMH's customers can afford luxury when everyday life comes to a standstill.

Annual Free Cashflow