CFT

Compagnie Financiere Tradition SA

CHF 269 2.1B market cap February 21, 2026

Compagnie Financiere Tradition SA CFT BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

PriceCHF 269

Market Cap2.1B

2 BUSINESS

Compagnie Financiere Tradition is a high-quality financial infrastructure business with a narrow moat built on network effects in illiquid OTC markets and regulatory barriers across 30+ jurisdictions. The capital-light agency model generates strong free cash flow (CHF 104M in 2024) with minimal capex needs, supports a growing dividend (44% payout ratio with 12.5% dividend growth), and benefits from market volatility through operating leverage. At CHF 269, the stock has re-rated significantly from its 2023 levels (P/E 9.4x) to 17.2x earnings, leaving limited margin of safety. The stock is worth owning but not at current prices - we recommend waiting for a pullback to CHF 210 (accumulate) or CHF 170 (strong buy) where the combination of 3-4% yield, earnings growth, and multiple stability would deliver 12-15% annual returns.

3 MOAT NARROW

Oligopoly structure (1 of 3 global IDBs), 7,500+ clients across 30+ countries creating network effects in illiquid OTC markets, regulatory licenses in 30+ jurisdictions creating high barriers to entry, 300+ specialized desks with deep expertise, growing TraditionData business (230 OTC data packages)

4 MANAGEMENT

CEO: Patrick Combes (Chairman & controlling shareholder via VIEL & Cie)

Good - growing dividends (CHF 4.86 to 6.75 in 5 years, +39%), active buyback program, minimal capex needs, no empire-building acquisitions, new bond issued at low rates (1.75-2.34%)

5 ECONOMICS

11.9% Op Margin

20% ROIC

26% ROE

17.2x P/E

0.104B FCF

-9% Debt/EBITDA

6 VALUATION

FCF Yield5%

DCF Range220 - 280

At upper end of fair value range - slightly overvalued after 54% rally in 2024

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Electronic execution gradually replacing voice brokerage over 10-20 years	HIGH	-	-
Key broker defections to TP ICAP or BGC reducing revenue in specific product segments	MED	-	-

8 KLARMAN LENS

Downside Case

Electronic execution gradually replacing voice brokerage over 10-20 years

Why Market Right

Rate normalization could reduce FX/rates trading volumes; Global recession compressing financial market activity

Catalysts

Continued operating margin expansion toward 13-15% through operating leverage; TraditionData scaling to become meaningful recurring revenue stream; Active share buyback program (up to 300,000 shares through May 2026); Market volatility surges drive volume spikes with high operating leverage

9 VERDICT WAIT

B+ Quality Strong - Net cash position (CHF 43M net cash at year-end 2024), CHF 175M undrawn credit facilities, low capex requirements (CHF 4M/year), 3 investment-grade bond issues totaling CHF 307M

Strong BuyCHF 170

BuyCHF 210

Fair ValueCHF 280

Wait for pullback. Strong Buy below CHF 170, Accumulate below CHF 210. At CHF 269 the stock is fairly valued with insufficient margin of safety.

🧠 ULTRATHINK Deep Philosophical Analysis

CFT Ultrathink: The Invisible Plumbing of Global Finance

The Core Question: What Makes This Business Special?

In the vast architecture of global financial markets, most investors fixate on the buildings -- the banks, the asset managers, the exchanges. Very few notice the plumbing. Compagnie Financiere Tradition is plumbing. It is the connective tissue between the world's largest financial institutions when they need to trade instruments too complex, too illiquid, or too bespoke for an exchange to handle.

The beauty of this business is its elegant simplicity. CFT takes no market risk. It holds no positions. It does not bet on the direction of interest rates, currencies, or commodity prices. It simply matches buyers with sellers in opaque markets where finding a counterparty is genuinely difficult, and charges a commission for the service. When a French bank needs to offset a 15-year euro interest rate swap exposure at 3am Tokyo time, it calls a Tradition broker. When a commodity house needs to hedge a complex crude oil calendar spread, it calls a Tradition desk. The broker's value is knowing who wants what, at what price, right now.

This is not a business that lends itself to disruption narratives or growth fantasies. It is, instead, the kind of steady, essential, under-the-radar infrastructure that Buffett has always appreciated -- a toll bridge on the river of global finance.

Moat Meditation: The Paradox of the Narrow-But-Durable Moat

The IDB moat is a fascinating paradox. It is narrow -- there is no patent, no exclusive license, no physical infrastructure that prevents competition. Yet it is remarkably durable. The industry has consolidated from eight meaningful players to three in the past fifteen years. No new global entrant has emerged in decades. Why?

The answer lies in what I call "liquidity network inertia." An IDB's value is directly proportional to the number and quality of counterparties on its platform. Banks route their most complex trades to the broker with the deepest pool of counterparties, because that maximizes the probability of finding the best price. This creates a self-reinforcing loop -- liquidity attracts liquidity -- that is extremely difficult to bootstrap from zero. A new entrant would need to simultaneously convince hundreds of institutional clients to send flow to a platform with no existing liquidity. This is the same cold-start problem that protects social networks, but applied to the arcane world of OTC derivatives.

The regulatory dimension reinforces this. Post-2008 financial regulation created an enormous compliance overhead -- know-your-customer, transaction reporting, best execution documentation, market abuse surveillance -- that functions as an invisible tax on market participation. The cost of maintaining compliance infrastructure across 30+ jurisdictions is significant and fixed, creating natural economies of scale. For an incumbent with 2,400 employees and decades of regulatory relationships, this cost is absorbed. For a new entrant, it is prohibitive.

But the moat is narrow because within the oligopoly, competition is fierce. The three global players compete aggressively for the best brokers (human capital is the primary asset) and for client flow. Staff costs at 71% of revenue tell you everything -- this is a people business where the key assets take the elevator down every evening. The question is whether the institutional knowledge, the technology platform, the regulatory infrastructure, and the network of client relationships create enough switching cost to prevent wholesale defection.

History suggests they do. Despite constant poaching attempts, the three global IDBs have maintained relatively stable market shares for a decade. Individual broker moves happen, but wholesale desk migrations are rare because the compliance, technology, and settlement infrastructure is not portable.

The Owner's Mindset: Would Buffett Own This for 20 Years?

Buffett would appreciate the agency model -- zero balance sheet risk, commission-based revenue, capital-light operations. He would appreciate the 26% ROE, the growing dividend, and the disciplined capital allocation. He would particularly appreciate that Patrick Combes, the controlling shareholder, has been running this business for 30 years with a long-term owner's mentality rather than a quarter-to-quarter manager's mentality.

But Buffett would also note several concerns. First, the human capital risk -- this is not a business with durable physical or intellectual property assets. The value walks out the door every night. Second, the controlling shareholder structure means the public minority has limited governance rights. Combes has been an excellent steward, but what happens when he is no longer involved? There is no public succession plan. Third, the long-term secular trend toward electronic execution is real, even if gradual.

Munger would push further: "What's the downside if electronification happens faster than expected?" The answer is that voice brokerage in truly complex, illiquid products is probably the last bastion to fall. You can electronify the trading of standard interest rate swaps, but you cannot easily electronify the negotiation of a bespoke 30-year cross-currency basis swap with embedded optionality. The human judgment, relationship trust, and market color that brokers provide in these instruments is genuinely difficult to replicate algorithmically. This gives CFT a 10-15 year runway at minimum.

The counter-argument is that 10-15 years ago, people said the same thing about equity block trading, and now algorithms handle much of it. The boundary of what "requires human judgment" keeps moving. CFT's investment in hybrid execution platforms (Trad-X for interest rate swaps, Bonds.com for corporate bonds) is the right strategic response -- meeting electronification rather than fighting it.

Risk Inversion: What Could Destroy This Business?

Inverting, I see three paths to permanent capital loss:

Path 1: Regulatory Extinction. If global regulators mandated that all OTC derivatives trade on exchanges with central clearing, the IDB model would evaporate. This is the existential risk. However, the post-2008 regulatory arc has actually settled into a stable equilibrium that preserves the role of IDBs while adding clearing and reporting requirements. The political will to push further radical reform has dissipated.

Path 2: Technological Obsolescence. If AI systems could perfectly match complex OTC counterparties with zero information leakage and full regulatory compliance, human brokers become unnecessary. This is the 20-year risk. Current AI capabilities are far from this, but the trajectory is directional.

Path 3: Controlling Shareholder Misbehavior. If Combes or his successors at VIEL & Cie decided to extract value through excessive related-party transactions, unfair squeeze-out, or strategic mismanagement. The evidence to date is that Combes has been an excellent steward, but the structural risk remains.

None of these paths is likely in the near term, which is why the business deserves a reasonable multiple. But all are possible over a 20-year horizon, which is why it does not deserve the premium multiple of a wide-moat business.

Valuation Philosophy: Is Price Justified by Quality?

At CHF 269, the market is paying 17.2x trailing earnings for a business that has delivered 26% ROE, 10% EPS growth, and counter-cyclical characteristics. This is not expensive for the quality, but it is expensive relative to the business's own history (it traded at 9-10x just 18 months ago) and relative to the narrow moat's duration.

The fundamental issue is that the stock has already been "discovered." The re-rating from 9x to 17x represented the market recognizing the improving margins and consistent earnings growth. Further re-rating from here requires either (a) continued margin expansion beyond current levels, (b) an acceleration in the TraditionData business, or (c) a sustained period of market volatility driving volumes. All are possible but none is certain.

At 12-14x earnings (CHF 180-210), the risk-reward becomes compelling because you are paying a modest price for the quality and getting the optionality on margin expansion and data monetization for free.

The Patient Investor's Path

The discipline here is restraint. This is a good business that I want to own, but not at any price. The controlling shareholder structure means there will never be a hostile takeover or activist campaign to close the valuation gap. The low float means the stock can be volatile. The right approach is:

Set alerts at CHF 210 and CHF 170. These represent 14x and 11x earnings, where the margin of safety becomes meaningful.
Monitor the H1 2025 results (already reported) and H2 2025 results (due March 2026) for margin trajectory.
Watch for a market-wide correction that could create an entry. With a beta of 0.13, CFT is unlikely to fall as much as the market, but illiquid Swiss small-caps can gap down on forced selling.
Track the TraditionData business for signs of acceleration -- this is the long-term optionality.
Monitor Patrick Combes for any health or succession signals.

The beauty of patience is that while waiting, CFT is compounding its book value at 20%+ returns on equity and paying you a growing dividend. If the entry opportunity never comes, that is fine -- it means the business continues to perform well. If it does come, you will be ready with conviction built on thorough analysis.

As Munger said: "The big money is not in the buying and the selling, but in the waiting."

Executive Summary

Compagnie Financiere Tradition is the world's third-largest interdealer broker (IDB), connecting banks and institutional counterparties for OTC financial products trading across 30+ countries. Founded in 1959 in Lausanne, Switzerland, and controlled by VIEL & Cie (68.21% via Patrick Combes), CFT operates a capital-light, commission-based agency model with zero proprietary trading risk. The company has delivered 5-year revenue CAGR of ~4.2% (consolidated) and net profit CAGR of ~10.3%, with ROE expanding from ~18% to 26% and operating margins improving from 7-8% to nearly 12%.

Investment Thesis (3 sentences): CFT is a high-quality financial infrastructure business with a narrow but durable moat built on network effects, regulatory barriers, and deep expertise in illiquid OTC markets. At CHF 269 (P/E 17.2x TTM), the stock trades above our fair value range of CHF 220-260 after a 54% rally in 2024 and further gains in early 2025. We recommend WAIT for a pullback to CHF 200-220 (accumulate) or CHF 170 (strong buy), where the 2.5% dividend yield and 10%+ earnings growth would deliver attractive total returns.

Phase 0: Opportunity Identification (Klarman)

Why does this opportunity exist?

Neglect/Obscurity: CFT is a Swiss-listed small-cap (CHF 2B) with no US ADR liquidity, no coverage from major sell-side banks, and average daily volume of just 2,941 shares. Most global investors have never heard of it.
Controlled company discount: VIEL & Cie owns 68.21% through Financiere VerEMr BV (Amsterdam), with 5.13% in treasury shares, leaving only ~26.7% true public float. This creates governance concerns and limits index inclusion.
Misunderstood business model: Investors may confuse IDB with proprietary trading firms. CFT is a pure agency broker - it takes no market risk, no position risk, no balance sheet risk. Its revenue is commissions on matched trades.
Complexity of OTC markets: The interdealer broking industry is inherently opaque, operating in illiquid OTC markets where price discovery is the core value proposition. This creates an analytical barrier.

Current Assessment: The opportunity from neglect was substantial when CFT traded at 9-10x P/E in 2023, but the stock has re-rated to 17x after strong earnings growth. At current prices, the neglect discount has largely closed. We are waiting for a better entry point.

Phase 1: Risk Analysis (Inversion Thinking)

How could this investment lose 50%+ permanently?

Electronic execution fully replaces voice brokerage (15% probability, high impact): If electronic trading platforms (Trad-X, Bonds.com, exchange-based) fully displace voice brokerage across all OTC asset classes, CFT's ~1,500 brokers become stranded costs. Mitigation: Complex, illiquid instruments (credit derivatives, exotic rates, commodities) remain resistant to full electronification due to the need for human judgment, relationship trust, and bespoke deal structuring. CFT is investing in hybrid execution (voice + electronic) and owns Trad-X and Bonds.com.
Regulatory elimination of OTC markets (5% probability, existential): If regulators force all derivatives onto exchanges, the IDB model evaporates. Mitigation: Post-2008 regulation (Dodd-Frank, EMIR, MiFID II) already pushed standardized products to clearing but actually reinforced the need for IDBs in remaining OTC segments. The trend has stabilized.
Loss of key brokers to competitors (20% probability, moderate impact): Star brokers who control client relationships could defect to TP ICAP or BGC. Mitigation: Staff costs at 71% of revenue indicate competitive compensation. Employee receivables of CHF 84M suggest significant sign-on bonuses. Share options are broadly granted.
Controlling shareholder value extraction (10% probability, moderate impact): VIEL & Cie's 68% stake creates agency risk. Related party transactions include lease payments of CHF 808K and receivables/payables. Mitigation: The amounts are immaterial relative to group size. Patrick Combes has been Chairman since 1996 and has grown the business substantially. Dividend has increased every year for 5+ years.

Bear Case (3 sentences):

CFT is a controlled company trading at cycle-high margins in a commoditized broking business where the largest player (TP ICAP) has 3-4x its revenue. Electronic execution will gradually compress voice brokerage margins, and the low-float structure means any selling pressure creates outsized price declines. The stock has already tripled from 2020 lows and the easy money has been made.

Pre-defined Sell Triggers:

Operating margin falls below 8% for two consecutive half-years (signals structural margin compression)
Key broker defections resulting in >10% revenue decline in any region
Patrick Combes exits without clear succession plan
Regulatory action forcing OTC products onto exchanges

Phase 2: Financial Analysis

Quality Metrics (5-Year Trend)

Metric	2020	2021	2022	2023	2024	Trend
Revenue (CHF M)	892	864	937	982	1,052	Positive
Operating Margin	8.1%	7.5%	7.3%	10.7%	11.9%	Improving
Net Margin	8.0%	7.5%	9.5%	9.6%	11.0%	Improving
ROE	~17%	~15%	~20%	~23%	~26%	Strong improvement
EPS (CHF)	9.39	8.52	11.64	12.71	15.09	Strong growth
DPS (CHF)	4.86	4.93	5.50	6.00	6.75	Consistent increases
FCF (CHF M)	88.7	61.3	132.2	116.5	103.6	Volatile but strong

DuPont ROE Decomposition (2024)

Net Profit Margin: 11.0% (115.6/1,051.6)
Asset Turnover: 0.81x (1,051.6/1,298.3 avg) -- Note: balance sheet inflated by matched principal positions
Equity Multiplier: 2.69x (1,298.3/483.0)
ROE: 11.0% x 0.81 x 2.69 = 24.0% (close to reported 26%)

Owner Earnings Calculation (2024)

Net Profit (attributable)         CHF 115.6M
+ Depreciation & Amortization     CHF  23.3M
- Maintenance CapEx               CHF  -4.2M  (all capex appears maintenance)
- Working Capital increase         CHF   0.0M  (normalized)
= Owner Earnings                  CHF 134.7M
Owner Earnings Per Share          CHF  17.55

Valuation Trinity

1. Liquidation Value (Floor):

Net Current Asset Value: Current Assets (988.2) - Total Liabilities (792.4) = CHF 195.8M
NCAV Per Share: CHF 25.51
Tangible Book Value Per Share: CHF 56.63
This is a services business - liquidation value is not meaningful. Floor is book value.

2. Going Concern Value (DCF - Conservative):

Owner Earnings:         CHF 134.7M (2024)
Growth Rate (5yr):      6% (conservative vs 10.3% historical EPS CAGR)
Terminal Growth:         2%
Discount Rate:          10%
Terminal Multiple:      12.5x (1/(0.10-0.02))

Year 1-5 OE:    142.8 -> 151.3 -> 160.4 -> 170.0 -> 180.2
PV of Years 1-5: CHF 595M
Terminal Value:  180.2 x 12.5 = CHF 2,253M
PV of Terminal:  CHF 1,399M
Total DCF:       CHF 1,994M
Per Share:       CHF 260

Sensitivity:
Growth 4%, DR 10%: CHF 225
Growth 6%, DR 10%: CHF 260
Growth 8%, DR 10%: CHF 300
Growth 6%, DR 12%: CHF 210
Growth 6%, DR 8%:  CHF 335

3. Private Market Value (Comparable Transactions):

TP ICAP trades at ~12x earnings (larger, more liquid, London-listed)
BGC Group trades at ~15x earnings (electronic platforms, growing data business)
Comparable IDB M&A is rare; last major deal was BGC/GFI (2014) and TP/ICAP (2016)
Private market value applying 12-14x owner earnings: CHF 1,616-1,886M = CHF 211-246 per share
With control premium (20%): CHF 253-295 per share

4. Graham Number:

Graham Number = sqrt(22.5 x EPS x BVPS)
             = sqrt(22.5 x 15.09 x 62.91)
             = sqrt(21,360)
             = CHF 146

Note: Graham Number is very conservative for high-ROE businesses.

Valuation Summary

Method	Value/Share	vs Current (CHF 269)
Graham Number	CHF 146	-46% (undervalued by Graham, but not applicable to high-ROE)
NCAV	CHF 25.51	N/A (services business)
Tangible Book	CHF 56.63	N/A
DCF Conservative (6%/10%)	CHF 260	-3% (roughly fair)
DCF Bull (8%/10%)	CHF 300	+12%
Private Market (12-14x OE)	CHF 211-246	-9% to -22%
Owner Earnings x 15	CHF 263	-2%

Weighted Intrinsic Value: CHF 250 (conservative blend) Margin of Safety at CHF 269: -8% (NEGATIVE -- stock is slightly overvalued)

Entry Price Targets

Level	Price	P/E	Yield	MOS
Strong Buy	CHF 170	11.3x	4.0%	32%
Accumulate	CHF 210	13.9x	3.2%	16%
Fair Value	CHF 250	16.6x	2.7%	0%
Current	CHF 269	17.8x	2.5%	-8%
Take Profits	CHF 300	19.9x	2.3%	-20%

Phase 3: Moat Analysis

Moat Sources

1. Network Effects (MODERATE - Key Moat):

CFT's value increases with each additional counterparty. With 7,500+ clients, 300+ desks, and operations in 30+ countries, it is one of only three global IDBs with the scale to offer comprehensive coverage.
Liquidity begets liquidity: banks prefer the broker with the most counterparties because it maximizes their chance of finding the best price.
Measurement: 3 million+ transactions/year, 250,000+ billion notional volume, 200+ products across 80+ currencies.

2. Regulatory Barriers (HIGH):

IDBs require financial services licenses in every jurisdiction they operate (FCA in UK, SEC/CFTC in US, MAS in Singapore, FINMA in Switzerland, etc.)
Compliance infrastructure is expensive and complex - anti-money laundering, market abuse surveillance, data protection across 30+ jurisdictions.
Post-2008 regulation created significant operational burdens that favor incumbents.
Measurement: The IDB industry consolidated from 8+ players to effectively 3 global players (TP ICAP, BGC, CFT) since 2008.

3. Human Capital / Expertise (MODERATE):

1,500 brokers with deep expertise in specific product niches.
Broker relationships are the channel through which institutional clients access liquidity.
Average broker has years of experience in their specific market segment.
Risk: Brokers can be poached, but the infrastructure, compliance, and technology platform they operate on is not portable.

4. Data Business - TraditionData (GROWING):

Growing market data business with 230 OTC data packages.
Financial data is becoming more valuable due to regulatory requirements (pre/post-trade transparency).
Recurring revenue stream with high margins.
Current Status: Still small as percentage of total revenue but expanding.

Moat Width: NARROW

The moat is real but narrow. The oligopoly structure (3 global players) provides pricing stability, but within the oligopoly, competition for brokers and clients is intense. The moat is narrower than exchanges (which have true monopolistic characteristics) but wider than most financial services businesses.

Moat Durability: 10-15 Years

Forces of Erosion:

Threat	Severity (1-5)	Timeline	Company Mitigation
Full electronification	3	10-20 years	Investing in hybrid + electronic (Trad-X, Bonds.com)
Regulatory change	2	Unpredictable	Diversified globally across jurisdictions
New entrants	1	Low probability	Barriers too high for de novo entry
Broker poaching	3	Ongoing	Competitive comp, deferred comp, options
AI replacing voice brokerage	2	5-15 years	Exploring data monetization, adapting

10-Year Trajectory: Moat likely STABLE. Complex OTC instruments will continue to require human intermediation for at least another decade. The data business provides an option on a widening moat if successfully scaled.

Phase 4: Management & Incentive Analysis

Ownership Structure

VIEL & Cie (Patrick Combes): 68.21% (via Financiere VerEMr BV, Amsterdam)
Treasury Shares: 5.13%
Adrian Bell (COO Asia-Pacific): 3.01%
Public Float: ~26.66%

Patrick Combes - Chairman

French citizen, ESCP Business School + Columbia Business School MBA
Acquired VIEL & Cie in 1979, took control of CFT in 1996
Tenure: 30 years as Chairman of CFT
Has grown the company from a mid-sized European broker to one of three global IDB leaders
Track record of organic growth over debt-fueled acquisitions

Capital Allocation Track Record (Last 5 Years)

Use of FCF	2024	2023	Assessment
Dividends (Parent)	CHF 46.3M (45%)	CHF 40.7M (35%)	Steadily growing, 44% payout - prudent
Share Buybacks	CHF 22.1M (21%)	CHF 12.1M (10%)	Active buyback at reasonable prices
Organic Investment	CHF 4.2M (4%)	CHF 4.2M (4%)	Very capital-light business
Debt Activity	CHF 99.6M issued	-	Issued new bond in 2024
Retained/Other	CHF 31.4M	CHF 59.5M	Building cash reserves

Assessment: GOOD. Management allocates capital sensibly - growing dividends, opportunistic buybacks, minimal capex requirements. The buyback program (up to 300,000 shares through May 2026) demonstrates commitment to returning capital. No empire-building acquisitions.

Key Management Compensation (2024)

Total key management remuneration: CHF 17.9M (2023: CHF 17.3M)
Salaries and bonuses: CHF 16.6M
Share options: CHF 1.2M
Variable compensation: 0-61% of total, linked to operating profit of subsidiaries
75,000 share options granted to Executive Board in 2024

Incentive Assessment: Compensation is reasonable relative to company size and industry norms. The variable component linked to subsidiary operating profit aligns management with shareholders. The controlling shareholder structure means management IS the owner.

Phase 5: Catalyst Analysis

Catalyst	Timeline	Probability	Impact
Continued margin expansion (to 13-15%)	2025-2027	60%	+15-25%
TraditionData scaling to meaningful revenue	2-5 years	40%	+10-20%
Share buyback continuation reducing float	Ongoing	80%	+5-10%
Market volatility surge driving volumes	Unpredictable	50%	+10-30%
Acquisition by larger player (unlikely due to controlling shareholder)	Low	10%	+30-50%
Dividend increase to CHF 7-8	H1 2026	70%	+5%

Negative Catalysts:

Risk	Timeline	Probability	Impact
Global recession reducing trading volumes	2026-2027	25%	-15-25%
Rate normalization reducing FX/rates volumes	2025-2026	30%	-10-15%
Key broker departures	Ongoing	15%	-5-15%

No catalyst assessment: The stock has re-rated significantly. Without a pullback, the catalysts mainly sustain current valuation rather than driving further appreciation.

Phase 6: Decision Synthesis

Megatrend Resilience Screen

Megatrend	Score	Notes
China Tech Superiority	0	Neutral - has Asia ops but not tech-dependent
Europe Degrowth	0	45% Europe revenue but financial markets are global
American Protectionism	0	US revenue from NY/Chicago desks, no tariff exposure
AI/Automation	-1	Long-term risk to voice brokerage
Demographics/Aging	0	Neutral
Fiscal Crisis	+1	Volatility benefits IDBs (volumes surge in crises)
Energy Transition	0	Energy broking benefits from transition complexity

Total: 0 | Tier 3 "Adaptable"

Expected Return Scenarios

Scenario	Probability	3-Year Return	Weighted
Bull (EPS CHF 22, P/E 18x)	20%	+47%	+9.4%
Base (EPS CHF 19, P/E 15x)	50%	+6% + div	+4.9%
Bear (EPS CHF 14, P/E 12x)	25%	-37.5%	-9.4%
Disaster (EPS CHF 10, P/E 8x)	5%	-70.3%	-3.5%
Expected 3-Year Return	100%		+1.4%

The expected return is low at current prices, confirming our WAIT recommendation.

Investment Recommendation

INVESTMENT RECOMMENDATION
Company: Compagnie Financiere Tradition SA    Ticker: CFT.SW
Current Price: CHF 269    Date: Feb 21, 2026

VALUATION SUMMARY
| Method                  | Value/Share | vs Current     |
|-------------------------|-------------|----------------|
| Graham Number           | CHF 146     | -46% (N/A)     |
| Tangible Book           | CHF  57     | -79% (N/A)     |
| DCF (Conservative)      | CHF 260     | -3% MOS        |
| Private Market Value    | CHF 246     | -9% MOS        |
| Owner Earnings (15x)    | CHF 263     | -2% MOS        |

INTRINSIC VALUE ESTIMATE: CHF 250 (weighted average)
MARGIN OF SAFETY: -8% (overvalued)

RECOMMENDATION:  [x] WAIT

STRONG BUY PRICE:    CHF 170 (32% below IV, ~11x P/E)
ACCUMULATE PRICE:    CHF 210 (16% below IV, ~14x P/E)
FAIR VALUE:          CHF 250 (Intrinsic Value, ~17x P/E)
TAKE PROFITS:        CHF 300 (20% above IV)
SELL PRICE:          CHF 375 (50% above IV)

POSITION SIZE: 2-3% of portfolio (when entry achieved)
CATALYST: Continued margin expansion + market volatility
PRIMARY RISK: Electronic execution replacing voice brokerage
SELL TRIGGER: Operating margin below 8% for 2 consecutive halves

Appendix: Sources Used

Primary Documents Downloaded

Document	Source	Local Path
Annual Report 2024	tradition.com	/analyses/CFT/data/annual-report-2024.pdf
Annual Report 2023	tradition.com	/analyses/CFT/data/annual-report-2023.pdf
Annual Report 2022	tradition.com	/analyses/CFT/data/annual-report-2022.pdf
Annual Report 2021	tradition.com	/analyses/CFT/data/annual-report-2021.pdf
Annual Report 2020	tradition.com	/analyses/CFT/data/annual-report-2020.pdf

Web Data Sources

Source	Key Data
stockanalysis.com/quote/swx/CFT	Financials, balance sheet, cash flow, dividends
companiesmarketcap.com	Historical price performance
tradition.com/investor-relations	Annual reports, share price data
finews.com	2024 results coverage

Data Validation

Metric	Annual Report	StockAnalysis	Consistent?
Revenue 2024	CHF 1,051.6M	CHF 1,044M	Close (rounding)
Net Profit 2024	CHF 115.6M	CHF 116M	Yes
EPS 2024	CHF 15.09	CHF 15.64 (TTM incl H1 2025)	Yes (different periods)
Equity 2024	CHF 483.0M	CHF 506M (total incl NCI)	Yes