value and opportunity

And on we go with yet another 15 randomly selected Norwegian share. Despite many uninteresting or crappy companies, again 2 made it onto the preliminary watchlist. Have fun !!

151. Sogn Sparebank

With around 8 mn EUR market cap, Sogn Sparebank seems to be the smallest Sparebank so far. Maybe interesting for people who live in Årdalstangen, where it is loctated, but not for me. “Pass”.

152. Aqua Bio Technology

From the name alone, I assumed that this 5 mn EUR market cap company would be a crappy 2021/2022 IPO and ….I was wrong. Rather it seems to be a crappy company that has been around for a little bit longer. The company has little income but consistent losses. “Pass”.

153. Norsk Solar

Norsk Solar is a 13 mn EUR market cap company that is another 2021 vintage IPO and has lost ~-80% since IPO. The operating plants are in Vietnam, Ukraine and Pakistan. Salaries are 5x its income and increasing mcuh faster than income. “Pass”.

154. Sparebank Nordmore

Another savings bank with a market cap of around 100 mn EUR. Valuation looks quite cheap with a P/E of 10 and a 7% dividend yield, however I have no clue how sustainable these earnings are and how banking in Norway works in general. “Pass”.

155. Arctic Fish Holdings

This is a 235 mn market cap fish farmer that farms Salmon in Iceland. It was IPOed in 2021 but is majority owned by larger player MOWI. Compared to other 2021 IPOs, the stock has done well and trades more than 50% above the IPO price. To be honest, I don’t think that Fish farmers are a suitable investment for me, therefore I’ll “pass”.

156. Kongsberg Automotive

Kongsberg Automotive, with a market cap of 235 mn EUR, is an automotive supplier that seems to mostly specialize in gear shifts and chassis for international OEMs. 2022 Operating income was -50% lower than 10 years ago, the company seems to stagnate or even worse. “Pass”.

157. Otovo

Otovo is a 150 mn EUR market cap company that was again, a 2021 vintage IPO that “only” lost around -50% from their IPO price. The company seems to be a “Rooftop Solar” player. The company is loss making and seems to have increased capital already at least once since its IPO. “Pass”.

158. Hexagon Composits

Hexagon Composits is a 435 mn EUR market cap company that “engages in the production and sale of composite pressure cylinders and fuel systems”. The company has been growing by 4x in the last 10 years but made losses in 4 out of 10 years.

The specialty about Hexagon Composites is that it holds a majority in Hexagon Purus, which is loss making but higher valued due to teh Hydrogen hype. Just a few days before I wrote this, Hexagon composites distributed an “in kind” dividend of a portion of its Hexagon Purus shares to shareholders.

Interestingly, the “non-Purus” segment is again divided into three subsegments, from which one is a super profitable one called Ragasco, which grows at~15% and has EBITDA margins north of 20%. Ragsco seems to manufacture LPG containers. Having a great business hidden inside a larger conglomerate is something I do like a lot as a starting point.

Overall, this is the first of this batch that looks interesting, so I put them on “watch”.

159. Belships

Belships is a 377 mn market cap ship owner that owns and runs a fleet of bulk carriers. As many other shipping companies, profits soared in 2021/2022 and the stock looks cheap with 6x trailing P/E. On the other hand, the chart shows that the business is cyclical and Q1 2023 earnings are already -50% below 2022.

Overall, this seems to be a stock that one should buy if things look bad, if at all. “Pass”.

160. Zalaris

Zalaris is an 78 mn EUR market cap HR Software provider that surprisingly is around alreadys some years. The company has shown decent growth, however with 40% has quite low gross margins for software and in 5 out of the last 7 years they have made a loss, mostly due to high interest expenses. Cashflow has been positive but SBC is increasing. At 46x trailing EV/EBIT, this doesn’t look to interesting, “pass”.

161. Zwipe

Zwipe is a 16 mn market cap company that is “focused on developing and commercializing secure, fast and easy to use biometric authentication solutions”. The company IPOed in 2019, has minimal sales but relevant losses. I swipe this to “Pass”.

162. Recreate

Recreate is a 9 mn EUR market cap, 2021 IPO, that lost around -90% since its IPO. It seems to be a financially distressed Real Estate company which I happily “pass” on.

163. XXL

XXL is a 56 mn EUR market cap Sports retailer that has clearly seen better days as we can see in the stock chart:

They really seem to scrap together every penny, i.e. by obtaining tax deferrals. XXL is active in the Nordics and Austria, although they plan to close Austria this year. XXL is clearly in distress and it needs to be seen if they survive in their curret form. One interesting aspect is that Swedish PE shop Altor owns ~1/3 and seems to keep buying shares. “Pass”.

164. Aker Solutions

Aker Solutions is a 1,8 bn EUR market cap subsidiary of the Aker Group, of which I alrady covered Aker Horizon, the “new energy” subsidiary earlier. Aker Solutions is a Offshore engineering specialist, providing services to the oil and gas industry as well as to offshore wind and fish farming. Some years ago, Aker Solutions took over struggling competitor Kvaerner which was finally merged and disolved in 2020.

Looking at the stock chart, we can see that it has been very volatile, with a low after the start of Covid and a 8x recovery since then:

The stock currently looks quite cheap, with a P/E of ~10 but the business clearly has cycles. Nvertheless, I think this one is worth to “Watch”.

165. Hydrogenpro

Hydrogenpro, a 109 mn EUR market cap company, sounds like and indeed is a late 2020 IPO that is a “OEM for high pressure alkaline electrolyser and supplies large scale green hydrogen technology & systems”.

This is actually quite interesting, especially with regard to the recent Thyssen/Nucera IPO that seems to have went quite well.

Hydrogenpro actuall has some sales as they seem to have already a production site in China. But this is also a problem, as I do think that it will be hard to sell the Chinese made electrolysers in Europe or the US. According to their quarterly report, they seem plan to build production sites also in Europe and the US, but I gues for this they might need more capital. With a operation margin of -80%, I guess the company has to do quite some capital raising going forward.

Hydrogenpro seems to be one of the better Hydrogen companies out there, but I still “pass”.