All Norwegian Stock, Part 12 – No. 166-180

Less than 100 shares left after this post… It took me a while to continue because I lost the whole post in the damn WordPress editor. Since the random generator picked some pretty interesting stocks this time, I wrote quite a bit. This version is shorter, but the 5 stocks are worth a “watch”. I am still optimistic that I will finish before the end of the year. Enjoy!!!

166. Zaptec

Zaptec is a €175M 2020 IPO market cap that surprisingly trades above its IPO price. According to Euronext, Zaptec is “a technology company within electric vehicle (EV) charging systems in Europe. The company develops charging systems for electric cars for multi-family and single-family homes and office buildings.

The company actually has decent revenue, is growing fast, is almost breaking even, and surprisingly doesn’t seem to have any debt. In the 1st quarter, the company reported sales growth of +100% with a slightly positive EBITDA margin. Orders even increased by +200%.

The company appears to be a manufacturer of charging stations and is based in Norway, but also exports ~2/3 of its production. Since Norway is clearly an early adopter of electric cars, Zaptec could use this to create a certain advantage over the competition. All in all, even though this is a recent IPO, it could be one thing “watches”.

167. Lea Bank

Lea Bank is a €77m market capitalization bank based in Oslo that, despite its small size, operates across Europe as a “digital specialist bank”. The stock looks cheap at 6x P/E, but looking at loan losses that are ~1/4 of earnings, it looks like they are catering to the “subprime” market. “Fold”.

168. Treasure

Treasure ASA is a €360m company majority (78%) owned by Wilh. Wilhelmsen. Treasure’s main business appears to be “owning 4,125,000 (11.0%) shares of Hyundai Glovis Co., Ltd.” (Hyundai Glovis), a global transportation and logistics provider headquartered in Seoul, Korea.

I don’t know the background of this, but apparently Korean logistics companies are out of my CoC, that’s why me “fold”.

169. Ice Fish Farm

Ice Fish Farm is, as the name suggests, a €293 million market cap fish farm that raises salmon in Iceland. Thanks to the IPO in 2020, they are still making losses. “Fold”.

170. Group of hunters

Hunter is (according to Euronext) an investment company with a market capitalization of EUR 4 million, which used to win oil tankers. They had no operating assets left at the end of the year. They seem to have paid everything off and have a few million in cash left over and claim to be focusing on CO2 in some way now. “Fold.”

171. Softox

Softox is a €7m market cap company that will “develop a portfolio of antimicrobial solutions to address the global challenges of skin infections, both antibiotic resistance and chronic infections”. The company has had new management since January 1st and is losing money, and could run out of cash this year. “Fold”.

172. ASA Pledge

Vow ASA is a company with a market capitalization of EUR 150 million, whose main activity is the treatment of wastewater from cruise ships. During the Covid/ESG/Cleantech hype they managed to position themselves as a sort of green circular economy stock with some JVs and the share price skyrocketed:

Since then, however, the situation has calmed down a lot. Sales are up, but profitability is down. I get the impression that management is quite promotional and every new order is hailed as a Nobel Prize win, no matter how small. “Fold”.

173. Rana Gruberová

Rana Gruber is a Norwegian iron ore miner with a market cap of EUR 190 million which was listed on the stock exchange in 2021. Surprisingly for this year, the stock is trading above the IPO price.

At first glance, it looks interesting. At current market prices, the company is relatively profitable and cheap (6x trailing P/E). They appear to be flush with cash. They also claim they will be able to mine “CO2 neutral” iron ore by 2025.

However, the market prices of their main product Hematide seem to be quite volatile, as we can see in this chart from the 6M presentation:

Although I have no idea about iron ore mining, I find it interesting somehow “watches”.

174. Philly Shipyard

As the name suggests, this Norwegian listed company is actually a shipyard in Philadelphia, USA. Shares just jumped +30% at the time of writing after there was a rumor that a Korean shipbuilder might be interested in taking over the company. With a market cap of around 45 million, it’s a small fish and the company is majority owned by Aker Group, which in turn is owned by one of Norway’s richest guys, self-made billionaire Kjell Inge Roekke, who is supposed to be a good capital allocator.

The company has been in the red for some time and still is, despite growing sales. “Fold”.

175. Protector Forsikring

Protector is an insurance company with a market capitalization of EUR 1.3 billion, which has been something of a “challenger” insurance company in the Nordic countries. They have been very successful selling insurance only through the broker channel and have recently expanded into the UK where they are growing like crazy. I blogged about them last March and did not invest. Since then, the stock has risen another 50%:

To be honest I have absolutely no idea how they can grow so fast especially in the US and as a new entrant their losses are way below the competition. This goes against everything I’ve learned in the insurance business, especially if you only sell through brokers. Protector is quite fast with its results, with Q3 numbers to be released on October 20th. I will continue “watches” but at least the UK results look too good to be sustainable to me. But of course I could be wrong again.

176. Nork Hydro

Norsk Hydro is an aluminum and electricity producer with a market cap of €11 billion that had a very good 2022 as energy prices rose and aluminum prices rose significantly. In 2023, prices appear to be falling, but Norsk Hydro is still fairly profitable, trading at ap/E of 12x and EV/EBIT of 9x, which are around long-term averages. However, profitability is still well above historical averages, which may indicate some “reverting to the mean” downside potential.

The Norwegian government owns 34% of the company. The company also appears to be further developing its energy segment, adding wind and solar renewables to its traditional hydropower generation.

In its IR presentation, the company states that the current plan to tax carbon emissions when importing at European borders somehow excludes aluminum scrap, which would be a big disadvantage for European manufacturers.

Overall, this kind of business is too volatile for me, so I will “fold”.

177. Goodtech

Goodtech is a €28m turnover market company that claims to be “one of the leading system integrators in the Nordic region with over 300 qualified engineers and specialists”. Despite its good name, the company has reported losses for 7 of the last 10 years. “Fold”.

178. Aquila Holdings

Aquila Holdings is a €20M market cap company that recently changed its name from “Carbon Transition” and seems to be doing something with seismic data and investments. “Fold.”

179. TGS

TGS (formerly TGS-Nopec) is a stock I have owned in the past. The company, with a market capitalization of EUR 1.7 billion, acquires seismic data, which it then sells to oil companies. In the past, their competitive advantage was that they did not own the ships themselves, but rented them when they were cheap.

Over the last few years it has consolidated markets and taken over Spektrum and even more commendably PGS, which however owns its own ships. Apart from a sharp increase in 2019, long-term shareholder value creation has been very limited over the past 10 years, as we can see in the chart:

They showed losses in 2020 and 2021, 2022 was very good. For whatever reason, 2023 looks pretty bad again with operating profit down -20% in the first 6 months. Tea The PGS store will close in early 2024. I will definitely visit them again in agreement with PGS, so “Watches.”

180. Bank Pareto

Pareto Bank is a bank with a market capitalization of 370 million that is part of the wider Pareto Group, but it is not Topco. Like many Nordic banks, the stock looks cheap at around 7x P/E and 1x book value. ROE has been consistently in the 13%-15% range, which is very good. EPS has doubled from 2016 to 2022.

The stock chart is spectacular but stable:

Overall, it looks like possibly the most interesting Norwegian bank I’ve seen so far, so I will “watches”.

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