After a directionless January for eurozone mid caps, the trend continued in February. The performance and valuation gap with large caps continues to widen... Although the date of the central banks' pivot is difficult to anticipate, we are convinced that it will be accompanied by a strong rebound in the category (as we saw at the end of 2023). However, we are seeing renewed interest from asset allocators, with flows finally returning to positive territory.
In a February impacted by corporate earnings releases, Amplegest MidCaps outperformed its index by 0.60%.
Apart from Compugroup (down 26% over the month), which announced that it would be investing more than expected in AI in 2024, and X-FAB (down 19%), which is suffering from destocking by its industrial customers, the publication season was very good for our selection.
Zegna (+18%), which we initiated at the end of January, is benefiting from a sharp but logical revaluation given the quality of its fundamentals and its relative undervaluation.
For once, Sopra Steria (+9%) reported a good operating performance and announced the appropriate disposal of its software business for the banking industry.
GTT (+10%) continues to benefit from the imbalance between LNG supply and demand, and is expanding its addressable market thanks to innovations (LNG fuel, hydrogen).
Besi (+20%) is demonstrating, with a very full order book, the interest of the semiconductor sector in its Hybrid Bonding machines, which are essential for continuing to improve chip performance beyond Moore's Law.
During the month, we participated in the IPO of German company Renk (+80%), world leader in transmissions for military vehicles (75% market share in Europe and the US). The high barriers to entry (particularly customer relations) and the high profile of the company did not seem to us to be fully reflected in the valuation at the time of the flotation.