Title: Portfolio Update 2026 (Part II) — the nine largest positions Show: Compounding Quality (Substack, compoundingquality.net) Guest: Pieter Slegers (author) Date: 2026-JAN-25 URL: https://www.compoundingquality.net/p/portfolio-update-2026-part-ii Length: written post (paid) — no timestamps Note: Paid-subscriber post captured via Stephen's logged-in session (the API body stopped at the paywall). Text verbatim; UI chrome (like/share counts, webinar registration buttons, subscribe CTAs) removed. Charts and the two summary screenshots ("the essentials of Our Portfolio today" and the closing "investment rationale of every company") are images not reproduced here; every per-position weight, performance figure and valuation number below is from the prose.
Hi Partner
Welcome to Part II of Our Portfolio Update.
You missed Part I? You can read it here.
Investing Masterclass: Quality investing in 2026
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January 29, 2026 | 2 PM ET / 8 PM CET Online Event
Portfolio Update
Here are the essentials of Our Portfolio today:
Our companies are fundamentally way healthier than the average company.
On top of that, our companies are now also cheaper than the S&P 500.
That's exactly what we want to see.
We own fundamentally better companies and the market doesn't seem to recognize it (yet).
Here's how the Owner's Earnings of Our Portfolio evolved over the past few years:
Our companies have grown their value on average by +19.7% per year since 2015.
In Thursday's article, you got an update about the first 9 positions of Our Portfolio.
Today it's time to dive in the other 9 positions (those with the highest weight).
Dino Polska ($DNP)
How does the company make money? Dino Polska, founded in 1999, is a Polish grocery company comprising medium-sized grocery supermarkets close to clients' places of residence in rural areas.
Weight in Portfolio: 5.6% Performance (%): +7.2%
Update investment case
The stock price of Dino Polska continued to be volatile in 2025.
Like for like sales growth was low at 0.5% in Q1 of 2025, but has rebounded in the quarters since then.
But the most important metric for Dino Polska is the number of new stores opened.
In 2025, they set a record, opening 345 new stores, almost 1 every day!
Source: Fiscal.ai
It proves what a great business Dino Polska is.
We believe the company will continue to do well in the future.
Current valuation level
Forward PE: 19.4x (lower than its 5-year average? < 24.8x? YES)
Expected Return from Our Earnings Growth Model: 12.9% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: 13,5% (Realistic growth expectations? YES)
Long-term estimated EPS-Growth: 24.4%
10-year CAGR FCF: 75.8%
General advice Dino Polska = Buy Dino Polska can be seen as 'the Costco of Poland'. The stock doesn't look expensive today while it still has a lot of growth potential.
Novo Nordisk ($NOVO-B)
How does the company make money? Novo Nordisk is a pharmaceutical company, focusing on drugs for diabetes and obesity. They're part of a duopoly with Eli Lilly in GLP-1 drugs
Weight in Portfolio: 5.7% Performance (%): -7.0%
Update investment case
Novo Nordisk has been a very volatile stock.
The main reason?
The market seemed to agree that Eli Lilly will dominate the industry while Novo Nordisk will keep struggling.
As a result, Novo Nordisk is more than twice as cheap as Eli Lilly (!).
Source: Fiscal.ai
I don't think this will last.
The obesity market is big enough for both companies
Novo Nordisk is ahead of Eli Lilly with GLP-1 pills
Novo Nordisk's pill is approved and on sale now (Lilly has only submitted for approval)
Lilly's approval looks like it's going to be delayed by at least another quarter
Novo Nordisk's pill led to higher weight loss than Lilly's
Novo Nordisk started the year really well. They are up +15% Year-to-date.
Current valuation level
Forward PE: 17.4x (lower than its 5-year average? < 28.3x? YES)
Expected Return from Our Earnings Growth Model: 14.3% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: 11.4% (Realistic growth expectations? UNSURE)
Long-term estimated EPS-Growth: 8.6%
10-year CAGR FCF: 10.3%
General advice Novo Nordisk = Strong Buy Novo Nordisk looks very cheap today. The low valuation level seems to offer a high margin of safety.
Kinsale Capital ($KNSL)
How does the company make money? Kinsale Capital is an established and expanding specialty insurance company focused exclusively on Excess and Surplus lines ("E&S") market in the United States.
Weight in Portfolio: 6.2% Performance (%): +5.3%
Update investment case
Kinsale Capital is an amazing business.
It's a nice market leader, growing quickly by taking market share
It's founder led (Mike Kehoe owns 3.8% of the business)
It has the best combined ratio in the industry (means low operating costs and great underwriting)
The insurance market was quite tough in 2025, but Kinsale's business continued to grow.
Operating earnings were up 20% for the first 9 months of 2025 compared to 2024, and they continued to grow their premiums written.
The stock is currently trading at a very attractive valuation level if you ask me.
The company trades at one of the lowest Forward P/E ratios we've seen.
Insiders seem to agree:
The company authorized a $250 million buyback
Gregory Share (a director) bought $1 million worth of shares recently.
Source: Fiscal.ai
Current valuation level
Forward PE: 20.0x (lower than its 5-year average? < 28.7x? YES)
Expected Return from Our Earnings Growth Model: 14.6%
Reverse DCF - Required FCF Growth for a 10% yearly return: 4.6% (Realistic growth expectations? YES)
Long-term estimated EPS-Growth: 14.8%
10-year CAGR FCF: 29.2%
General advice Kinsale Capital = Strong Buy The insurance industry had a hard time last year. This provide opportunities as Kinsale Capital now trades at an attractive valuation level.
Ameriprise Financial ($AMP)
How does the company make money? Ameriprise Financial is a leading diversified financial services firm with $1.2 trillion in assets under management and administration.
Weight in Portfolio: 6.2% Performance (%): +21.8%
Update investment case
Ameriprise Financial is a strong business that just keeps executing.
It's growing its Assets Under Management (AUM) and is bringing out new products like the Signature Wealth Platform for advisors, and HELOCs and checking accounts for clients.
Ameriprise is a cannibal stock, so the most important thing is the buybacks.
If we take a quarterly view, we see the trend is still steadily downward.
Source: Fiscal.ai
Management expects to return about 85% of capital to shareholders through dividend and buybacks.
In short, the investment case for Ameriprise remains intact.
Current valuation level
Forward PE: 12.2x (lower than its 5-year average? < 11.9x? YES)
Expected Return from Our Earnings Growth Model: 11.6% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: 4.4% (Realistic growth expectations? YES)
Long-term estimated EPS-Growth: 10.3%
10-year CAGR FCF: 10.8%
General advice Ameriprise Financial = Buy Ameriprise Financial is a Cannibal Stock. The company has a strong track record and has great capital allocation skills.
Games Workshop ($GAW)
How does the company make money? Games Workshop is a company that makes and sells tabletop games, where players use miniature figures to play battles in fantasy or science fiction worlds.
Weight in Portfolio: 6.8% Performance (%): +100.7%
Update investment case
Games Workshop is one of the best boring companies in the world.
They benefit from two very interesting characteristics:
The most loyal clients in the world A lot of pricing power
Every year, they raise the price of their products by 4-5%, and the players just keep buying more.
Even though Games Workshop has returned more than 13,000% since its IPO, there's still room for the company to grow.
Source: Fiscal.ai
Why?
Significant growth potential in the U.S. and Asia
Licensing deals like the one for a Warhammer 40,000 adaptation by Amazon Studios
Current valuation level
Forward PE: 31.3x (lower than its 5-year average? < 23.8x? NO)
Expected Return from Our Earnings Growth Model: 9.4% NO
Reverse DCF - Required FCF Growth for a 10% yearly return: 16.4% (Realistic growth expectations? UNSURE)
Long-term estimated EPS-Growth: /
10-year CAGR FCF: 31.5%
General advice Games Workshop = Hold Games Workshop is an amazing company with predictable revenues. The only thing we dislike is the current valuation level.
Evolution AB ($EVO)
How does the company make money? Evolution AB is a market leader in developing fully integrated B2B Online Casino solutions like Roulette, Blackjack, and Baccarat (Baccarat is typically played in Asia).
Weight in Portfolio: 7.6% Performance (%): -21.7%
Update investment case
Evolution AB has been through a perfect storm.
Regulatory risks
Strikes in Malta
A short report
Cybercrime in Asia
As a result, the stock price is down more than 60% from its all-time highs.
But at the last earnings report in October, Evolution had some good news.
Europe returned to quarter-on-quarter growth
North America grew 14.5% year-on-year
Planning a second studio in Michigan
Evolution is a clear market leader, with high margins. That means they generate a lot of free cash flow, and management has been using it to heavily buy back shares.
Source: Fiscal.ai
At these low valuation levels, that should create a lot of shareholder value.
When we consider the buybacks and the dividend yield, Evolution AB's shareholder yield currently equals 10%.
Current valuation level
Forward PE: 9.9x (lower than its 5-year average? < 22.5x? YES)
Expected Return from Our Earnings Growth Model: 15.3% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: -2.2% (Realistic growth expectations? YES)
Long-term estimated EPS-Growth: 5.7%
10-year CAGR FCF: 53.2%
General advice Evolution AB = Buy Evolution AB looks very cheap. It's a 'Buy' and not a 'Strong Buy' because there are also serious risks involved with the company.
Kelly Partners Group ($KPG)
How does the company make money? Kelly Partners Group is a serial acquirer providing services like bookkeeping, tax planning, and advice on how to grow a business or handle money wisely.
Weight in Portfolio: 7.6% Performance (%): +106.2%
Update investment case
Kelly Partners Group is currently the second-best performing stock in Our Portfolio. The stock is up +106% since we first bought it in November 2023.
The company is executing well on its expansion to the United States and the fragmented industry provides them with plenty of acquisition targets.
We did an extensive update after the annual shareholder meeting. You can read it here.
The most important things we learned?
Founder Brett Kelly believes the stock is undervalued
They're seeing more growth opportunities than they can currently fund
When we look at the growth estimates for the next 5 years, we can see why Mr. Kelly thinks the stock is undervalued.
Expectations by FY31:
Revenue: $500 million
EBITDA: $175 million
NPATA: $40 million
If we compare this to the current numbers, you get the following yearly growth rates:
Revenue: +24.4%
EBITDA: +31.4%
NPATA: +28.2%
If the company achieves these growth rates, the stock would be very undervalued in hindsight.
Source: KPG Investor Relations
Current valuation level
Forward PE: 31,2x (lower than its 5-year average? < 29.4x? NO)
Expected Return from Our Earnings Growth Model: 13.4% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: 17.1% using NPATA YES
Expected growth rate by management: 30%
General advice Kelly Partners Group = Strong Buy Kelly Partners Group is an amazing company that should keep growing at very attractive rates in the future.
LVMH ($MC)
How does the company make money? LVMH is a dominant force in the luxury industry with a diverse portfolio of brands covering a wide range of consumer products and experiences.
Weight in Portfolio: 8.2% Performance (%): +7.0%
Update investment case
LVMH had a hard time in 2025 because of a lot of temporary issues.
Lower demand for Wines & Spirits
Lower demand in Asia (a key growth source for LVMH)
Post-pandemic correction in luxury demand
Uncertainty about import tariffs in the US
A potential 'ultra rich tax' in France: A proposed 2% annual wealth tax on individuals or households with assets exceeding EUR 100 million
That led the stock to decline by more than 40% last year.
Source: Fiscal.ai
But Bernard Arnault was buying shares the entire time, showing his conviction.
At the last earnings report in October, we saw that he was right.
Demand for fashion & leather goods improved in Asia
Wines & Spirits returned to growth
The group returned to organic revenue growth in Q3
The key lesson? Always focus on the long term as an investor.
"The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett
Current valuation level
Forward PE: 25.7x (lower than its 5-year average? < 24.9x? NO)
Expected Return from Our Earnings Growth Model: 9.2% NO
Reverse DCF - Required FCF Growth for a 10% yearly return: 13.2% (Realistic growth expectations? UNSURE)
Long-term estimated EPS-Growth: 2.5%
10-year CAGR FCF: 16.1%
General advice LVMH = Hold LVMH is an amazing company. However, the valuation looks quite 'luxury' today.
Medpace Holdings ($MEDP)
How does the company make money? Medpace is a company that helps drug and medical device makers test and develop new treatments by managing clinical trials and research.
Weight in Portfolio: 11.1% Performance (%): +147.9%
Update investment case
Medpace is our largest positions thanks to the very strong stock performance.
The company did really well recently. The stock increased by +69% over the past year.
The company is seeing lower cancellations and a growing backlog, with a book-to-bill ratio of 1.03x.
While Medpace is back to growth, the biotech industry went through a tough time at the beginning of 2025.
The good news?
Medpace heavily bought back shares during this period.
This is a strong sign of great capital allocation skills.
Source: Fiscal.ai
Current valuation level
Forward PE: 37.8x (lower than its 5-year average? < 29.7x? NO)
Expected Return from Our Earnings Growth Model: 11.9% YES
Reverse DCF - Required FCF Growth for a 10% yearly return: 14.1% (Realistic growth expectations? UNSURE)
Long-term estimated EPS-Growth: 14%
10-year CAGR FCF: 24.6%
General advice Medpace = Hold Medpace is an amazing business. However, you can't call the company cheap today. Management also stopped buying back shares because of this reason.
Conclusion
That's it for today.
We're very proud owners of the companies in Our Portfolio.
The investment rationale of every company looks as follows:
As a reminder, the Portfolio Spreadsheet can be found here.
Everything in life compounds Pieter (Compounding Quality)
Book Order your copy of The Art of Quality Investing here
Used sources Interactive Brokers: Portfolio data and executing all transactions Fiscal.ai: Financial data
Disclaimer As a reader of Compounding Quality, you agree with our disclaimer. You can read the full disclaimer here.