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Carriage Services operates within the death care industry, focusing primarily on funeral homes and cemeteries. The recent decline in the company’s share price can be attributed to various factors, including the unsuccessful merger attempt with Park Lawn, a Canadian peer, challenges posed by interest rate headwinds, and normalization from covid. Despite these setbacks, the fundamental strength of the business remains intact, and the current valuation appears to be undervalued.

Grupo Aeroportuario del Centro Norte ticker OMAB is a Mexican airport operator with its most significant asset being the Monterrey airport. Monterrey is the second largest metro area in Mexico and is also the industrial hub of Mexico known for manufacturing steel, cement and auto parts. Due to its manufacturing focus and its proximity to the American border the city should benefit from the nearshoring trend.

Published 1/6/2024 Aeroporto Guglielmo Marconi di Bologna (BIT:ADB) Annual Review I review each position in my portfolio on a yearly basis and now it’s time for Aeroporto Guglielmo Marconi di Bologna(BIT:ADB). ADB is the operator of the Bologna airport in Italy. In my last article I wrote how ADB was set to eclipse 2019 PAX numbers by 2023 and recover from covid. And as it turned out I was correct as of Q3 2023 PAX is up 7.5% vs 2019. This PAX increase is mostly due to low cost carriers growth as legacy carriers are still down nearly 20% from 2019 levels. Though PAX and Revenue have recovered from covid, profitability is still lagging. Overall I think ADB is still a good company and I’ll continue to hold going forward. Key Metrics As I’ve been doing in my other annual reviews I keep track of 4 key metrics to make it easier to evaluate the performance of a company and know when to buy and sell. For ADB the metrics I think are important are PAX, Rev, Profit Margin, and Rev per PAX. Year Q3 2023 YTD Q3 2022 YTD Q3 2019 YTD PAX 7.7M 6.5M 7.2M Revenue Ex Non Aero €87.8M €72.6M €83.2M PM 14% 14% 19% Rev per PAX €11.4 €11.2 €11.6 Source: Company reports, author created table Both PAX and Revenue look good coming into Q3 2023 which are up 18.7% and 20% from last year and 7.5% and 5.5% from 2019. This is despite total European PAX still being -3.1% below 2019 levels. Margins though are still lagging. Management blames the mix between low cost and legacy airlines and cost pressures. In particular Aviation margins are well below 2019 levels. Going from 30% EBITDA margins in 2019 to 14% in 2023. This could partially be explained by the decreased rev per PAX as ADB has lower aeronautical charges than in 2019 and also lower aeronautical revenue than in 2019. Also Ryanair the airport’s major airline earlier this year signed a 6 year agreement with ADB. This could be why aero charges and thus EBITDA margins went down this year. Nevertheless this is a positive as it lowers the risk of Ryanair abandoning ADB. In 2024 we’ll probably see some relief here as the new airport charge table goes into effect which in general increases prices by 10%ish though it looks like passenger charges declined to offset that somewhat. Source: ADB 2023 Q3 Presentation Overall 2023 has been a solid year though weaker than I expected from my last article but much better than peers. I’m also confident that profitability will improve. Also fun fact the airport has a Lamborghini Huracán that guides planes on the runway. Holding Net Income will probably come in around €17-€18M which would put the current multiple at 16-17 times earnings. Which isn’t super attractive, especially when looking at the Mexican airports. However the bet is still on margin expansion as there is still a 3% spread on margins compared to 2019. At 2019 margins the company would have made €22M in income pushing the PE down to 13 which is much more attractive especially given the airport has very little debt. Though if you look at margins between 2014-2019 the average was 13% which is 1% below what the company is coming at this year. So maybe I was too aggressive before. I had thought margins might be sustainable due to the fact it had been almost increasing every year between 2014-2019 and as airports gain more PAX they gain more sales leverage. Another negative is that the dividend has yet to be reinstated. I’ll probably continue to hold and only look to sell if I find a better idea and I hit my 90-100% fully invested target.

In 2023, the Pacific Smiles Group experienced improved key performance metrics but still struggles with modest profitability and a high employee-to-revenue ratio. Management transitions and a potentially costly payroll tax issue also pose challenges. Despite potential growth from newly opened clinics, an unfavorable sales leverage situation and staffing surplus stymie profitability gains. While these measures point to a recovery, the future is uncertain, owing to the ongoing payroll tax dispute and questions about management alignment with shareholder interests.

Summary of my Portfolio as of Q3 2023.