Scherzer & Co - Further squeeze-outs of portfolio holdings

Scherzer & Co’s (PZS) NAV closed FY19 almost flat y-o-y, lagging the broader market recovery over 2019. On the other hand, the rapid sell-off amid the coronavirus lockdown drove Q1 NAV down by 26% by end March, in line with main DAX indices. In FY19, PZS reported an 88% y-o-y lower result on financial instruments and 36% y-o-y lower income from dividends, which led to a net loss for the period of €8c per share. We note that PZS is focused on lesser-known stocks, which may take time to unlock value. A potential NAV kicker may come from its €139m (as at end-March 2020) portfolio of extra compensatory claims (ECS).