value and opportunity

Looking at Danish stocks in a random order is a very good “therapy” against the current market volatility. Therefore the next batch of shares. This times, three of them made it onto the “watch” list.

21. Jeudan A/S

Jeudan is a 2 bn EUR market cap real estate company that seems to do something right as the long term share price shows:

According to TIKR, despite the nice share price increase, the company trades at 11x P/E (trailing). However, as Real Estate companies are outside my circle of competence (with the exception of super special situation), I “pass” on Jeudan.

22. Bang & Olufsen

B&O is clearly one of the most “iconic” Danish brands. The company has a market cap of 350 mn EUR and the stock chart shows that despite its iconic brand, business seems to be tough:

The main issue is that the company seems to stagnate since at least 10 years. Even after a nice rebound for Covid, 2021 topline is at the level of 2012. 6 out of the 10 last financial years resulted in losses. The product range seems to be mostly headphones and speakers plus TV sets. Number of shares however has quadruplet over 10 years. B&O looks like an “eternal turn-around” and therefore I’ll “pass”.

23. OrderYOYO AS

OrderYoYo is a 78 mn EUR market cap that offers SaaS solution for Restaurants. Mainly, they offer white label solutions for take away restaurant, enabling them to get an online presence including an ordering system. The company IPOed in 2021 and after an initial boost, the stock price seems to be now below the IPO price.

They seem to target ARR of around 130 mn DKK or ~17 mn EUR. as of 6M 2021, they were EBITDA positive, which is not too bad. They also seem to have entered the German market.

If I understand this correctly, the company offers small restaurants an alternative to a platform like JET and Co., including payment and online marketing. This screenshot shows the major value proposition to restaurants:

On the negative side, the CEO has stepped down for health reasons in December and the company scaled down sales estimates for 2021 vs. IPO communication.

As I am still interested in this sector , I’ll “watch” that one.

24. Hydract A/S

Hydract is a 24 mn EUR market cap “Green tech” company that has been IPOed in 2021 and the share price has been going down since then.The company seems to own a patent on a technology on how to control valves.As I don’t really understand what they are doing and it is hard to get any information. I’ll “pass”.

25. ISS A/S

ISS is a 3,4 bn market cap company that is offering real estate facility services, mainly, cleaning but also catering and security. Empty offices during Covid was clearly not helpful, but the business seems to have stagnated before which explains the underwhelming performance in the years since their IPO in 2014.

Even in their best years, margins were slim and returns on capital just OK. I don’t see that things are getting better going forward. Nothing to see here, “pass”.

26. Harboes Bryggeri A/S

Harboes Bryggeri is a 57 mn EUR market cap brewery that also makes non-alcoholic beverages. As many of its German peers, margins and returns on capital are pretty poor, often these companies are rather real estate plays.

Multiples don’t look attractive with the exception of price-to-book. Maybe it is a deep value opportunity, maybe not. “Pass”.

27. Dantax A/S

Dantax is a 21 mn EUR small cap that is active in consumer electronics. They are selling high end audio speakers under different brands (Raidho, Scansonic, Gamut). A quick look at the share price shows a massive share price increase by the end of 2021:

To be honest, I didn’t really found out what happened, but operationally business doesn’t seem to go that well according to the Danish Language 6M report. The CEO has been selling in February. I am not a Hifi expert, but my guess is that these days high end audio speakers are a niche business with limited growth opportunities. “Pass”.

28. Chr. Hansen Holding

Chr. Hansen is a 8,4 bn EUR market “bio science” company that produces “innovative cultures, enzymes, and probiotic products that help determine the taste, flavor, texture, shelf-life, nutritional value, and health benefits of a variety of consumer products in the food industry, especially in the dairy industry;”

At first sight, it looks like a very stable and attractive business with EBIT margins >20%. However growth over the last 5 years or so was more or less flat.

That explains the share price development over the past years:

With 8x EV/Sales and 35x P/E, the stock looks expensive but is cheaper than in the previous years.

Chr. Hansen is a relatively well known “Hidden Champion” that produces important ingredients for its customers that can not be easily replaced.

The biggest shareholder is Novo Holdings, which also owns large stakes in Novo Nordisk. Overall an interesting company that I would like to understand better. “Watch”.

29. NTG Northern Transport Group

NTG is a transport/ logistics company with a market cap of 1,1 bn EUR. Looking at the stock chart, one can easily see that supply chain issues have also boosted their profits and share price:

Profits are expected to more than double in 2021. the share price increase made the stock expensive, tarding at 35x trailing EPS and 25x 2022 EPS. Personally, I think the transport business is cyclical and that the current profit levels will not stay for very long, therefore I’ll “pass”.

30. GN Store Nord

GN Store Nord, a 6,7 bn EUR market cap company,  is the second Danish hearing aid player after Demant, but in addition also produces Headphones and headsets under the Jabra Brand.

At first sight, the company seems to grow nicely,  mostly >10% sales pa. over the last 10 years. However Gross margins have been going down and they seem to have increased leverage significantly.

The stock has been hit hard by the current correction after performing nicely for a long time:

Jabra was clearly a Covid-19 winner, even I bought myself a Jabra headset during lock down.

With 20x P/E (2022), the stock doesn’t look expensive. I think the hearing aid market would indeed warrant a deep dive. “Watch”.