For the second year now, I would like to start by thanking our investors on behalf of the entire Cobas Asset Management team. Our sincere thanks for trusting in and being a part of our company, even if the markets have not yet recognised the value we see in our portfolios, and they have not, for now, given us the returns we expect.

For those of you who could not come to our recent Annual Conference in Madrid and Barcelona, we would like to give you a brief summary of what we discussed. And if you have the time, I would recommend watching the video on our YouTube channel. In either case, the important thing is for you to take home the basic ideas sought to convey.

First, we offered some key figures for us, such as assets under management, which now exceed 2,500 million euros, and the more than 22,500 shareholders we have, with special mention made of the more than 4,000 shareholders who are minors. The latter figure confirms what we thought: we should not require a minimum investment amount, as there are many people who would like to invest from an early age, but who did not have the volume of assets necessary.

Then, we reviewed some of the strategies used in the funds:

In our international portfolio the most significant figures are the 100% upside potential of the current net asset value and that it is a portfolio with a P/E ratio of 8.2x.

Current, it is more highly concentrated than was usual in the past, as it is not easy for us at present to find good companies. So, when we do find such companies, we place a greater weight in them.

This concentration is distributed in five blocks that account for 78% of the securities making up that strategy:

Shipping (25%). Although we had never invested in this sector, now is when we have the highest concentration. This is because we started by analysing one company, and found that throughout the value chain of the sector, there were others in which we could enter, and we ended up taking positions in 13-14 related companies.

In half of these companies, we made the investment because – although they are now on the downside of the cycle – they all have long-term contracts (13-year average). Hence, we do not believe we are taking on the risk of the cycle, rather the risk that counterparties will not pay their contracts, because those counterparties are quite sound companies, as we have often said.

We could call the other half “commodities”. That is, companies that have no competitive edge (like long-term contracts), but where we believe there is a mismatch between supply and demand. As supply and demand begin to even out, the financial position of these companies will become more attractive moving forward.

Commodities (11%). When we speak of commodities, we are referring mainly to fertilisers, which are now at their lowest prices of the past 10-15 years. At these prices, no one will establish fresh capacity or operate new mines.

Automotive (11%). We know this sector well because of our investments in the past, and now we are taking advantage of the poor share performance of recent years to make an entry. We do not know the precise reason for this performance, as it is likely due to the economic cycle of the United States, the restructuring of the sector or technology disruption. But we can see that many of these companies have net cash and an upbeat outlook for the future.

United Kingdom (16%). We have taken advantage of falls in the market and in the pound sterling to enter a market that is now the most discredited among global investors.

Asia (15%). We are extremely fortunate to work with Mingkun Chan, our analyst in Asia. Being there in person enables us to gain great insight into the Asian part of our companies and, owing to Mingkun’s more than 10 years of experience working with us, we are ready if we encounter an investment opportunity.

Of the 12 Asian companies we have in the portfolio, 11 are family-controlled, and 10 have a net cash position.

In our Iberian portfolio the most significant figures are the 44% upside potential of the current net asset value its P/E ratio of 10.8x.

It should be noted that during the year, we have managed to increase our target value, even with good gains in the portfolio. As noted on many occasions, for us it is more complicated to generate value in Spain and Portugal owing to small number of stocks in the two markets.

Another significant change in the Iberian portfolio is that we have amended the fund prospectus to have the capacity to invest in companies whose assets are in Spain, even if they are not listed here.

In our large company portfolio, the most significant figures are the 83% upside potential of the current net asset value and that it has a P/E ratio of 8.7x.

It surprised even us to be able to find so much upside potential in large companies, as the larger they are, the more difficult it is to find differences between price and value, given that they are followed by many analysts.

Many of the stocks coincide with the international portfolio, although more than 14.5% of the portfolio is invested in three pharmaceutical companies, where some coincide with a major worldwide investor known to all.

In addition, the management company has taken on additional commitments both with our shareholders and with the company.

Cobas AM, to the benefit of our shareholders, has decided to cover the costs of third-party analysis and to not pass these costs on to the funds

In the past, asset management companies would not distinguish between the costs of securities trading and the services of third-party analysis. The two services were offered by brokers within the same package, and the costs would be passed on to the funds. Since the entry into force of the MiFID II, asset managers are required to distinguish between the costs of each of these services and specify whether they are passed on the fund or covered by the manager.

As we announced last year, one of the commitments we have taken on with society is to launch Value School ( as a company committed to the dissemination of financial culture.

In this first year, Value School has translated five books into Spanish to make financial knowledge more accessible to all, and virtually every week educational events have been held with managers of other entities, university professors, etc.

I would encourage you all to register on the website so you can stay informed of all the events.

Lastly, and we see this as our most important commitment, Cobas AM is donating 15% of its revenue to social benefit work, through development assistance and investment with a social impact.

I hope you can all make the time to see the full conference on our YouTube channel.

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