value and opportunity

Some news from the previous days / weeks :

Fortum

Fortum reported solid 2011 figures, the IR presentation can be found here. EPS came in at 1.99 EUR, but included special positive effects. Which is of course a nice change compared to RWE and EON which ussually show “one time” negative effects.

Most interesting in my opnion is the improved profitability of the Russian business. Overall, Fortum seems to be one of the highest quality uitilities in Europe and one of the view with organic growth prospects. So although Fortum looks expensive compared to EON and RWE, is still think it’s better value for money.

EMAK Spa

Emak’s share price nicely recovered ytd. They released a net sales update a week ago. The “old EMAK” saw a sales decrease of -1.2%, same for same sales growth including the “new” companies would have been +2.3%. So if one uses the numbers given, one can calculate the implied growth rate of the new business as follows:

EMAK old 2011 Sales: 204.2 mn EUR
EMAK old 2010 sales: 206.65 mn EUR (-1.2 growth)

EMAK pro forma sales total 2011: 356.9 mn EUR
EMAk new cos sales 2011: (356.9-204.2) = 152.7 mn EUR

EMAK new cos sales 2010: (356* (1-2.3%))-206.65 = 142.0 mn EUR

Growth EMAK new cos = 152.7/142.0 = 7.5% growth in 2011

So maybe the deal wasn’t so bad at all ? Let’s wait and see.

Green Mountain

Green Mountain shot up almost 50% from its January lows on the back of a presumably great earnings report. The comapny earned 66 cents for the quarter, a drastic increase to previous quarters. Q4 2010 was only 2 cents.

Total Cashflow was actually positive, however mostly driven by a sale of a subsidiary. “Real” free cashflow adjusted by movements in working capital is still negative.

So for the time being i will keep the short although the volatility is clearly an isse.