The weekly navigator

From the past week, we highlight: 1) Kinnevik seeks a buyback mandate and proposes two new board members ahead of its EGM; 2) we met VEF’s and Creditas’ CEOs in Stockholm; and 3) Flerie is set to present at our Healthcare Conference in Oslo next week.

The weekly navigator

From the past week, we highlight: 1) Bure reported Q3 results, outperforming the SIXRX by more than 5%-points; 2) VEF’s largest holding, Creditas, reported Q3 numbers, with origination improving 17% QOQ ahead of a profitable growth reacceleration and potential listing; 3) Apotea (10% of Creades’ unlisted assets) announced its intention to go public before year-end; and 4) Kinnevik’s chair is set to step down in 2025.

Latour Investment AB: 1 director

A director at Latour Investment AB bought 1,100 shares at 277.000SEK and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years ...

The weekly navigator

From the past week, we highlight: 1) Latour reported c9% NAV growth QOQ in Q3, outperforming the SIXRX, while the premium to our NAV is now only 2%; 2) Aker raised its dividend payout policy to 4–6% of NAV, giving it the sector’s highest dividend yield; and 3) Bure is due to report its Q3 results tomorrow, 8 November.

Latour (Buy, TP: SEK335.00) - In a good place ahead of 2025e

Q3 saw solid NAV growth from Latour of 9% QOQ versus SIXRX at 4%. While the lower demand levels may remain for a few more quarters, Latour’s Industrial Operations show pockets of solid momentum. The margin resilience and the return of significant acquisitions should pave the way for solid earnings growth when the demand picture improves over the coming quarters, as we expect. We reiterate our BUY and have raised our target price to SEK335 (332), based on: 1) 10% NAV growth from its listed portfo...

The weekly navigator

From the past week, we highlight: 1) VNV Global wrote down its unlisted portfolio by 3% QOQ in its Q3 report, as its Gett sale remains under regulatory review; 2) starting in this issue, we include Spiltan Invest in our sector overview (SEK9.2bn NAV with the key asset being Paradox Interactive); and 3) Latour is set to report Q3 results next week.

CMD: NAV should rise from here

The weekly navigator

From the past week, we highlight: 1) our deep dive into Kinnevik’s ‘core growth companies’; 2) our lowered target price of SEK105 for Kinnevik, following the Q3 results; 3) our raised target price of SEK330 for Investor; 4) our lowered target price of SEK375 for Industrivärden; and 5) our reduced target price of SEK68 for Flerie.

Industrivärden (Hold, TP: SEK375.00) - Portfolio view less positive

We maintain a positive view on large parts of the portfolio, including an assumption of 19% 12-month forward NAV growth. That said, with the near record-low discount of 2%, we believe investors are still better off investing directly in the underlying assets, which are trading at a portfolio-weighted P/E of c13x, a ~25% discount to the OMXS30. We remain on the sidelines and reiterate our HOLD, and have lowered our target price to SEK375 (380), reflecting our more neutral view of its core holding...

Investor (Buy, TP: SEK330.00) - Continued underlying progress

While NAV saw a fairly undramatic improvement QOQ in Q3, we note the continued strong operational progress across the Patricia Industries portfolio, including 13% OCF growth YOY. We recognise the thin discount to reported NAV (4%), should markets slump near-term, but remain attracted to Investor’s sustainable outperformance characteristics, including its strong balance sheet. We reiterate our BUY and have raised our target price to SEK330 (325), reflecting 8% 12-month forward NAV growth.

Higher conviction after strong Q3

Strong Q3: Mölnlycke and Laborie highlights

Kinnevik (Buy, TP: SEK105.00) - Needs to reverse NAV decline

Kinnevik’s Q3 was yet another disappointment, mainly due to the write-down of its entire SEK1.1bn stake in VillageMD. Negative sentiment towards the stock is unlikely to change near-term in our view in the absence of NAV growth or potential share buybacks, and we note low market expectations ahead of the CMD, scheduled for 23 October. We have cut our target price to SEK105 (110), reflecting our new NAV estimate, but reiterate our BUY as we view the ‘core growth companies’ as attractively valued ...

Opportunity for the bold

Q3: weaker than feared

Kinnevik (Buy, TP: SEK110.00) - What’s in the box?

Owing to recent negative news flow and the opacity of Kinnevik’s unlisted portfolio, we believe the market is missing the potential of its five ‘core growth companies’. Our analysis suggests this group is set for a 2024–2026e gross profit CAGR of 41% and 2026e EBITDA of USD224m. At the current 42% discount to NAV, we calculate a 2026e EV/sales of 1.0x and EV/EBITDA of 18x. We see ample re-rating potential as the operational progress becomes increasingly clear to the market, and like the increasi...

The weekly navigator

From the past week, we highlight: 1) VEF’s portfolio looks to be in a good place ahead of its Q3 report (due at 08:00 CET on 23 October), but is still trading at a 43% discount to NAV; 2) starting in this issue, we include Byggmästaren in our sector overview; and 3) Kinnevik, Investor, Industrivärden and Flerie are set to report Q3 results next week.

Headwinds in Q3

The weekly navigator

From the past week, we highlight: 1) we expect low-single digit NAV growth QOQ in Kinnevik’s Q3 report; 2) we hosted an investor lunch with Flerie, where we see upside potential from NAV growth and a discount contraction; and 3) we published a sector update, highlighting our impressions from meeting with 13 investment company CEOs over the past few weeks.

Pick your contender

Following our ‘investment company weeks’ at DNB Markets in Stockholm, we give a brief update on our view of the sector and summarise our impressions from lunch presentations with 13 investment company CEOs. From a broader perspective, we note the increased investor interest in the sector, as well as the structurally lower discounts to NAV, albeit not in the VC-oriented companies. We continue to have Investor as our sector top pick, with additional BUYs on Latour, Kinnevik, VEF and Flerie.