All Danish Shares part 15 – Nr. 141-150
What is the best way to relax after a crazy day at the stock market ? Exactly, looking at 10 randomly selected stocks from Denmark. This time, two candidates made it onto the watch list. Enjoy !
Skako is a 22 mn EUR market cap company that is manufacturing machinery for the cement and construction industry. The company is not expensive (P/E of 11), has Ok returns on capital and OK margins. However, the company seems to stagnate since more than 10 years and the coming construction downturn will clearly not help their business. “Pass”.
142. United Int. Enterprises
UIE is a 844 mn market cap company that holds several minority stakes, the largest being a palm oil and coconut plantation in Malaysia (a listed company named United Plantations) plus a stake in a Swedish company called Schörling. The company is headquartered in Malta.
the company has a quite positive long term stock price development:
According to TIKR, the company seems to have bought back shares over the past years and increased earnings. Interestingly, United Plantations share price is flat over the last 10 years.
According to their 6M report, the discount of the Holdco to its parts was only 2%. In the past, this discount seems to have been significantly higher. Overall a interesting company but clearly outside my circle of competence. “Pass”.
143. Simcorp AS
Simcorp is a 2,4 bn EUR market cap Software company that offers solution to asset managers and other financial services companies. I actually know one of their products from personal experience in a previous professional role.
The company has good margins (gross 60%, EBIT 25%) and has been growing by around 10% p.a. Shareholders have been very happy until recently as we can see in the Chart:
Despite the drop in the share prcie, Simcorp still trades at 18x EV/EBIT and 23 x P/E for 2022. A year ago I would have said that this is relatively cheap, in the current market however, quality companies trade at less than that.
However, as many other traditional software companies, SimCorp seems to be in the process of transforming itself from a license based model to a SaaS model, which at the moment seems to depress earnings.
Overall, I think Simcorp could be quite interesting, therefore it goes onto the “watch” list.
Mdundo is a 10 mn EUR market cap company that was IPOed in 2020 and “develops and operates an online music service, which is based in sub-Saharan Africa. The company offers Freemium, which is a free service and Premium, which is the which is subscription-based service. The primary source of revenue is Advertisement, which consists of display banners and audio advertisements embedded into the music tracks”
The company claims to have 22 mn active users which translates into 2 mn EUR annual revenues and 1 mn EUR negative EBITDA. Total cash burn in the year ending 30.6. had been -3 mn EUR, remaining cash at 30.06. has been -1 mn EUR. So either they do a capital increase or the lights will go out soon. “Pass”.
145. North Media
North Media is a 165 mn EUR market cap conglomerate of different businesses, the main business being distribution of printed ads to households. They alos run online portals, for instance for job search.
At first sight, the company seems to have staged an impressive turnaround from a loss in 2015 and 2016 to ~25% operating margins in 2021. 2022 currently looks weaker again as the underlying advertising revenues seem to be slowing. The share price has already reflected some of this down turn:
Valuation wise, North media looks very cheap according to TIKR at 8xP/E and 3x EV/EBIT. The company owns a significant securities portfolio as well as net cash. They have also distributed significant cash to shareholders over the past few years as dividends and/or share buybacks.
This looks quite interesting, “Watch”.
146. Blue Vision
Despite its cool name, Blue Vision is a 1,5 mn EUR nano cap that seems to do something with real estate. “Pass”.
147. DonkeyRepublic Holding
Donkey Republik is a 10 mn EUR market cap bike sharing company that went public in early 2021. They have a run rate of 1 mn EUR sales and (of course) are making losses. Cash seems to last for another year or so. “Pass”
148. Bavarian Nordic
Bavarian Nordic is a 2,1 bn EUR market cap Biotech company that became somehow famous a few months ago, as they are one of the few companies that have a working vaccine against Monkeypox. Monkeypox thankfully doesn’t seem to be the next Covid however, which might explain that Bavarian Nordic’s share price has retreated after a spike earlier this year:
Bavarian Nordic also develops a Covid-19 vaccine as well as anti-cancer vaccines.
Sales have interestingly don’t match last year sales and losses have been increasing. Gross margins have been declining significantly. However the company has enough cash as it raised equity capital several times over the past years. The company doesn’t seem to have a controlling shareholder. I didn’t find out what their relationship to Bavaria is. Despite being an interesting stock, this is clearly “too hard” for me and therefore I’ll “pass”.
149. Scape Technologies
Scape Technologies is a 4 mn EUR market cap software company specializing in “bin picking” application for manufacturing processes. This sounds great, but the company has been making losses since its IPO in 2018. “Pass”.
Impero is another “2021 Vintage IPO” SaaS company with a 12,5 mn EUR market cap. As all the other similar IPOs, they are burning cash and might run out of cash soon. “Pass”.
Now the interesting Danske things are here: I’m very interested about your final take on SimCorp and North Media (I think some of the langfrist-funds has a small stake in here). In my view, the parts of the company (beside the job portal – which is pretty strong in the public sector, but not in private corps – they also own the leading Dansk rental portal boligportal.dk and some other platform bets) would be worth way more if split appart (and maybe if the management stops investing a lot of the net liquidity into unprofitable tech stocks (as they did over the past year).