All Danish Shares part 2 – Nr. 11-20

And on we go with the second post after kicking off last week. Two of the stocks already appeared in the blog some years ago and overall, these ten candidates yielded two “Watch list” candidates.

11. Conferize A/S

Conferize is a 15 mn EUR market cap company that seems to develop software for managing conferences. The company seems to be still “pre revenue”. I do not fully understand why a pre revenue Software company is public, but I’ll happily “pass” without further analysis.

12. Jobindex A/S

Jobindex is a 220 mn EUR market cap company that operates an online Job board which covers all Danish vacancies. The company has been growing nicely until 2018 but then stagnated already in 2019. The chart reflects this to a certain extent, the share price now is similar to the price during the “high growth” phase:

Jobindex

The recovery from Covid has been strong and Jobindex has been raising estimates most quarters. The most recent trading update indicated operating profit of around 170 mn DKK or around 23 mn EUR for 2021.

Fundamentally, a tight job market is usually good for these portals as employers have to make an effort in order to attract talent.

Although the company only reports in Danish, the stock looks interesting. The 23 mn EUR Operating profit should translate into an EV/EBIT of below 10 as the company has not debt. “Watch”.

13. Copenhagen Capital A/S

Copenhagen Capital is a 52 mn market cap company that seems to invest into residential and commercial Real Estate. As I am not interested in real estate companies in general, I’ll “pass”.

14. Gronlandsbanken A/S

Gronlandsbanken, a 150 mn EUR market cap bank active only in Greenland, is an “old friend” for me as I actually invested into Gronlandsbanken in 2012. I sold the shares in 2015 as I was concerned about what zero rates do to banks. Just looking at the chart, this was clearly a good decision:

Gronlandsbanken

Interestingly, Gronlandsbanken did increase their net income from 40 DKK/Share to around 70 DKK/Share (est. 2021), however they seem to have reduced their pay out ratio from 100% to around 50%. So P/E has actually decreased from around 16x to currently around 9x. The same actually happened for many other financials, but the stability of Gronlandsbanken is remarkable. “Watch”

15. Luxor A/S

Luxor is a 81 EUR mn market cap investment company that invests into a wide range of assets. The company only reports in Danish. Although the long term track record looks Ok, I am not that much interested in investment companies. 86% of the shares seem to be in fixed hands. “Pass”.

16. Lollandsbank A/S

Lollandsbank is a small, 85 mn EUR market cap regional bank that has a quite “constructive” stock chart for a bank:

Lollands

Operationally, the development was less exciting, with profits more or less flat since 2016. The biggest driver seems to be an increase in P/E multiple from around 5x in 2016 to somewhere between 8-9x today.

Regional banks are not my focus, therefore “pass”.

17. CBrain A/S

CBrain is a 560 mn EUR market cap software company that specializes in business automation solution. the stock chart looks similar to other software companies with a big draw down from its recent peak:

CBrain

With 27x P/revenue (2021), the stock looks still very expensive. Growth is ok, but not spectacular, the same goes for profitability. Not sure why people thought that this is worth 50x revenue a few months ago. “Pass”.

18. Enalyzer A/S

Enalyzer is a tiny, 2 mn EUR market cap software company which isn’t profitable and whose share price has done little over the last 10 years. “Pass”.

19. Novo Nordisk A/S

Novo Nordisk is clearly “The” Danish Flagship company with a market cap of 167 bn EUR. I have looked at the company two times in 2016, first here and then here. Buying back then at 220 DKK per share would have been a killer move for “Hindsight Capital llc” as the chart shows:

Novo

The interesting part of the story is that revenues indeed dd not grow that much since 2016, only about 5% p.a., net income slightly more. EPS however have grown 6,7% due to the wonders of share buy backs. The “kicker” however came from a nice multiple expansion from around 17x (Trailing EPS) to currently 32x. 

What haven’t changed since then is the fact that I do not understand the business. At the current valuation, the upside seems to be quite limited even considering ongoing buybacks. “Pass”.

20. Penneo A/S

What in German would sound like a Sleep focused company is actually a 61 mn EUR market cap company specializing in workflow automation software for accountants. The company has revenues but also losses which are increasing even in relative terms. At 9x revenues, this doesn’t look so good for a loss making software company with some growth. The Ebitda margin of -44% compares only with 34% yoy growth, not enough to make this an interesting investment. “Pass”.

 

 

 

8 comments

  • Hi MM&I, thank you for the platform you provide for us amateur investor to learn alongside you. I am slowly building knowledge on the banking sector, so pardon my ignorance. For the Bank of Greenland, the current interest rate environment could strongly favor them right? They could put the entire deposit base to work (bonds) instead of keeping so much in cash.

    • JP,
      thanks for your nice comment. With regards to rates & Banks: Yes, all things equal, higher yields should lead to better interest margins. However, the unknown factor is if and how credit losses develop if we run into a recession which doesn’t look unlikely right now.
      mmi

  • Concerning Jobindex. It looks like the pay a juicy dividend. Was ist one-time thing or the they started with the idea of regular payouts? I could not find any info concerning this subject…could you?

  • Followed you for years and like your approach ect. when you go deep.
    My first thought was sincere interest for you taking on danish stocks. But maybe you should give C25(25 most valuebly/traded stocks) serious and deserved deep analysis instead of “looking” at entire listing. After all the danish stocks have been the best market for investors for roughly 20 years(Handelsblatt). Superficial off-writing Novo – highest MV in the Nordic, worldleader in diabetes an more – does nothing good for you. Worse – for me – it leaves the entire nation-go-through-list with a rather unfortunate impression. In the best meaning: do it right og don´t at all.

    • Well, not every approach works for everyone.

      I will add little value to anyone if I go deep on Novo as this is far outside my circle of competence. My only chance would hen it is unpopular or I would have any special insight from somewhere else and then have a longer time horizon than everyone else. The probability is low and that’s why I don’t spend much time on such a stock.

      When I go through these lists, I look for stocks where I can gain an edge and those are most likely the less traded ones where I have some knowledge / active opinion.

      If you don’t like it, you can have the money back that you pay for the Value & Opportunity premium subscription 😉

      • I disagree with Peter’s opinion 100%. With all the sovereign/retirement/mutual/pension/endowment/hedge funds and brokerage houses, C25 are analyzed ad nauseam. I believe they are least deserved of deep and serious analysis. What are you going to discover that is unknown to the public? What value does one provide by validating Novo Nordisk’s moat?

        I reckon from A-Z is the way to go. Screeners have many flaws, one of it is it blocks stocks on the fringes. You set 15% ROE, it blocks stocks with 14.8 14.9% ROE. You set 20 PE it blocks stocks with 20.1 20.2 PE….so on. And sometimes it blocks stocks that fit the criteria for no reason. From A-Z you are able to discover some pretty decent gems.

  • Pretty interested in hearing your thoughts on Jobindex! I have recently been looking at North Media, which have a similar website in their portfolio.

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