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E

Telefonaktiebolaget LM Ericsson (publ)

Archived by Alpha

Ericsson is a global supplier of telecommunication equipment. Its market position and technology moat has not resulted in positive returns for long-term investors, despite global 4G and 5G roll-out. The share price declined 50% in the past decade (apart from temporary highs), and is only 1/10 compared to its all-time high during the dot-com bubble in the late 1990s. The company has been involved in multiple bribery crises across the globe (incl. with ISIS). The business now has headwinds from the tougher economic climate that also impacts 5G spend. In 2023 the company announced to cut 8.500 headcount (8%) globally. And looking at recent earnings the company has mostly missed analysts expectations. Further downsizing continues in 2024. In my opinion Ericsson does not qualify as quality investment.
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  • 50.00 -15.41% on 18/10/2023
04/12/2023｜Analyses:2
0
N

Ngenic AB (publ)

Archived by Alpha

Ngenic sells technical solutions for energy management directly to consumers, via partners, and to B2B customers. Since the IPO in 2021 the company showed good growth, but from very low numbers (too small for a public company). Sales is mostly product sales (hardware) and does not result in material recurring revenue. With its cash burn-rate the company requires new funding. Given the shareholders structure and the company performance I expect this to be expensive in terms of shares dilution, if at all possible. Furthermore there is a convertible loan of 10.2Mkr dated October 2024 (more dilution), and the company has 9.5Mkr debt to the Swedish tax authorities. Ngenic was on my watch-list for its interesting market. Changed the rating to sell! Risk for bankruptcy.
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  • 5.00 -56.44% on 16/05/2024
07/11/2023｜Analyses:0
0
V

Volkswagen AG

Archived by Alpha

Volkswagen is a German carmaker delivering >8 million cars globally of which around 600k electrical vehicles (7%). Global car sales is 25% below all-time high from 2018 due to the Diesel-gate which caused a drop from 8% to 6% in global market share. It looks like the company is recovering being #1 BEV brand in Europe and with 7% global market share. At 4x PE ratio (TTM) and 7% dividend the company looks attractive, but the economic climate is a risk with €55B financial lease on the balance sheet. Market conditions are worsening; with Chinese competition and risk for a down-turn in sales. For Q3'2023 management warns for lower margins due to higher material costs. I stay on the side-line and follow developments as potentially interesting investment for the longer-term EV trend.
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23/10/2023｜Analyses:2
1
S

Svenska Handelsbanken AB (publ)

Buy by micke

Handelsbanken had a good result 2023Q3 with net earnings of 4.02 SEK/share, slightly up from Q2. My best guess is that we will remain on these profit levels, a small decline in 24/25 when interest rates are lowered, but the bank's growth will compensate for this in a year or two. My approximation is 15 SEK/year net profit, PE23=6.5.The bank normally has a P/E of 10, which gives an upside of about 50%. I think we will see dividends of around 70%*15=10,5SEK, i.e. 10%, dividend yield.
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18/10/2023｜Analyses:6
2
R

Rottneros AB (publ)

Buy by micke

Strong balance sheet as a result of very strong pulp prices during 2022, hedged electrical prices 2022, and relatively prudent financial management knowing that pulp is a cyclical business. Prices on wood used has increased, i.e. higher costs, due to Ukraine invasion limiting Russian supply to Finland. The pulp prices are declining due to global recession, and will probably continue to decline and/or stay low for some time before they turn up according to Rottneros outlook. My guess is that the share price might continue to drop during Q2 and after the Q2 report where I expect a weak result, and depending on outlook on pulp prices stay low or turn up, where my guess is that it will turn up during the second half of 2023, since the company's finances are overall good with low debt. Short term risks and variations, should be a good long term investment with good total return (10%/year) and low long term risk.
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12/10/2023｜Analyses:7
0
A

Aker Solutions ASA

Hold by micke

Management positive in the 23Q2 webcast. Very good growth. A JV with SLB (70%) and Subsea 7 (10%) and Aker Solutions (20%) will be completed during 2023H2, not sure about effects. Aker Solutions will receive 700MUSD in a combination of stock and cash for 20% of the JV, i.e. they are puting in more business than their share of the JV. Subsea is now about 1/3 of Aker Solutions. Good order intake, good result both in oil&gas as well as renewable energy (offshore wind). P/S=0.47. The stock has developed very well since bottom in March 2020. However AS is now an engineering company and I think AS should be able to have 10% margin on revenue which already with 2022 revenue would give a share price of 80 NOK, which might be a bit too optimistic but 60 NOK should be possible. The revenue would probably increase to 50 mdr NOK 2023, with current margin of 5% and no premium for growth the share price might be ~50 NOK - without the JV. From 23Q2 "Free cash flow generation of around NOK 0.8 billion on average annually from 2024 to 2026 excl. Subsea JV proceeds and dividends".
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10/10/2023｜Analyses:2
1
A

Afry AB

Archived by Alpha

AFRY is a technical consulting firm with segments Infrastructure (35-40%), Process industry and industry & digital solutions. The company is priced at a discount compared to its peers; which is explained by lower margins, ROC and ROE. Revenue and earnings doubled in the past 5 years. But that did not result into higher earnings per share. Initially the valuation jumped to 30x P/E but is back on its old level around 13x P/E. It looks like the market is pricing in risk for a downturn and has learned that business growth does not translate into better performance (per share-holder). Management has the objective to improve profitability in the next years. I do not see the required quality to invest, and think there is risk for more downside (ballpark 100kr).
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12/09/2023｜Analyses:1
0
F

FLEX LNG Ltd.

Monitor by micke

The dividend is very good at around 10%, which is a reason to have this stock. The stock price has performed very well the last 2 years. There is a potential upside that new ships need higher rates to be profitable, but supply and demand will set the price. I don’t see much upside but there are significant risks with interest rates (there are significant hedges in place which will postpone this effect), more ships entering the market. LNG prices and effect on shipping as well as macro are very uncertain the coming years.
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17/08/2023｜Analyses:4
2
S

Swedbank AB (publ)

Hold by Alpha

Swedbank is Sweden's largest and Europe's most profitable bank. The bank is valued at 7.5x TTM earnings Q2'23. In Q1'23 the share price suffered from the US banking crises, and fear for real-estate related bad debts in Sweden. In Q2'23 Net Interest Income (NII) drives the strong earnings growth with decreasing lending margins and (slower) increasing deposit margins. In the current economic climate with higher interest rates I would expect a continued high level of NII. Although margins decline this can be off-set by a lower percentage of fixed interest rates as retail customers currently prefer flexible interest rates. On the other hand total mortgage growth could turn negative in 2023. In the short-term 1-2 year the bank can continue to benefit from the interest rate dynamics. With 26kr/share TTM earnings Swedbank is valued with 25% margin-of-safety to fair-value. The 5 year average annual earnings are about 19kr/share resulting in 10x PE, which is the long-term average valuation. Is the market pricing in a 20% earnings decline? The 5% dividend yield can be expected to improve given the cash position and earnings. A hold with limited expected up-side and down-side risk.
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06/08/2023｜Analyses:1
0