February was another complicated month for small caps. Against this backdrop, we managed to slightly outperform the index (-2.4% vs. -3.1%). However, we are seeing an improvement in terms of flows and also in terms of our companies' results.
In the portfolio's PEA-PME pocket, PRECIA (3.9% of assets under management), REWORLD (3.1%) and BILENDI (2.2%) delivered particularly positive messages about their profitability in the second half of 2023 and their growth prospects for 2024.
In the non-PEA-PME pocket, Sopra-Steria (3.2%), GTT (2.7%) and Exclusive Networks (1.7%) announced results well ahead of expectations.
Among the disappointments, X-FAB's outlook (1.8%) was poorly received by the market, but we believe that the reaction was largely disproportionate. Overall, seed companies have announced a slightly disappointing outlook for 2024, with the 1er half-year flat or even declining. X-FAB was the only stock to suffer, which seems a little unfair given its low valuation.
We took slight profits on PRECIA, VIRBAC and ID LOGISTICS.
The fund's valuation is at a significant discount, especially the PEA-PME part, while the macroeconomy seems to be showing signs of recovery, inflation finally seems to be under control and market expectations in terms of monetary policy have become reasonable once again.