Rich valuation, slow NAV growth

Stretched valuation despite sluggish NAV

Q2 in line with ABGSCe. HOLD: P/NAV near ATH, but we have a positive bottom-up view.

AB Industrivarden: 1 director

A director at AB Industrivarden bought 200,000 shares at 347.565SEK and the significance rating of the trade was 67/100. 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 c...

The weekly navigator

Key takeaways from last week: 1) VEF’s largest holding Creditas announced a milestone partnership with Nubank; 2) Kinnevik invested USD100m in US mental health benefits platform Spring Health; 3) Aker is to sell its 62% stake in Ocean Yield; and 4) Svolder reported its year-end results.

The weekly navigator

Key takeaways from last week: 1) Latour invests in battery charger supplier CTEK in conjunction with the latter’s planned IPO; 2) Kinnevik will receive at least SEK2bn in extraordinary distributions post Tele2’s exit from the Netherlands; 3) Finnish SPAC Virala traded up 35%+ last week, which could improve the sentiment for Nordic SPACs; and 4) Investor-owned Sarnova acquired a strategic add-on for ~USD290m.

The weekly navigator

Key takeaways from last week: 1) Investor continues its portfolio pruning, and supported Agnafit Bidco’s SEK69bn equity value offer for Sobi; 2) we hosted VNV Global’s CEO at DNB’s Nordic TMT & Consumer Conference; and 3) we come away encouraged by Investor’s sell-side briefing on Patricia Industries.

The weekly navigator

Key takeaways: 1) we downgraded Lundbergs to SELL (HOLD) on valuation concerns; 2) Latour remains in fair valuation territory despite its high premium to reported NAV; 3) VEF completed a SEK885m directed share issue; and 4) Bloomberg reported that a consortium is weighing up an acquisition of Investor-owned SOBI.

The weekly navigator

Key takeaways from last week: 1) the sector premium to NAV contracted by ~5%-points on growing valuation concerns; 2) VEF has had a busy few months, and we continue to believe the story is overlooked; and 3) Bure reported Q2 NAV and is one of only two companies to outperform the SIXRX on NAV growth YTD.

The weekly navigator

Sector NAV premiums are at all-time highs, although NAV growth is trailing the SIXRX index YTD. Thus, in this weekly we delve into what is driving the sector multiples expansion and consider alternative approaches for how the market implicitly values investment companies.

The weekly navigator

Key takeaways from last week: 1) we downgraded Kinnevik to HOLD (BUY) as we find most near-term catalysts are reflected in the share price, as the stock is trading at a well-deserved premium to NAV; 2) we still believe Investor offers the best risk/reward profile in the sector; and 3) we see good value in Aker. We do not expect to publish the next weekly navigator until early August.

The weekly navigator

Key takeaways from last week: 1) Kinnevik’s fintech holding Pleo saw a 4x valuation uplift in its recent USD150m funding round; 2) we stayed on the sidelines in Industrivärden, reiterating our HOLD; and 3) VEF shares soared 13% last week, which we attribute to its recent Swedish redomestication.

Industrivärden (Hold, TP: SEK315.00) - Discount expansion to offset NA...

Industrivärden’s C-shares have enjoyed a strong re-rating in recent months and are trading at a 0% discount to NAV. Based on our updated portfolio view, we forecast 5% 12-month forward NAV growth, which is offset by our view that the discount to NAV should widen to 5%, and possibly even 10%, given that Industrivärden offers a 100% static listed and easily replicated portfolio with a NAV CAGR track record of 11% in the past 15 years corresponding to a no.11 position among the Nordic investment co...

The weekly navigator

Key takeaways from last week include: 1) we hosted Investor’s CFO Helena Saxon for an investor call; 2) VEF’s second-largest holding, Konfio, raised USD125m, broadly in line with VEF’s reported NAV valuation; and 3) VNV Global initiated share buybacks to tackle its discount to NAV.

The weekly navigator

Key takeaways from last week: 1) we hosted an investor call with Svolder’s CEO; and 2) Kinnevik-owned Budbee’s CEO outlined IPO plans in a Bloomberg article.

The weekly navigator

Key takeaways from last week include: 1) we hosted investor calls with Bure, Creades, and VEF; and 2) Kinnevik accelerated its push in the food ecosystem.

The weekly navigator

Key takeaways from last week: 1) Kinnevik and VNV Global-owned Babylon Health is expected to go public in H2 2021 through a SPAC merger; 2) we hosted Latour’s CEO for an investor presentation; 3) we still see an arbitrage opportunity in Kinnevik’s redemption shares; and 4) the 180-day lock-up since the Douglas family sold Latour shares in December has expired.

The weekly navigator

Key takeaways from last week: 1) we reiterated our HOLD on Lundbergs; 2) we see a ‘wall-of-cash’ story developing in Kinnevik’s largest holding Tele2 after its CMD; 3) Latour is expected to be included in the OMXSB Index; and 4) we are set to host management presentations for eight investment companies.

The weekly navigator

Key takeaways from last week: 1) Kinnevik’s share price soared 10% in the first week of trading without Kinnevik’s redemption shares; 2) we see an arbitrage opportunity in Kinnevik’s redemption shares; 3) Industrivärden bought 4.5m shares in Sandvik for SEK1bn; and 4) Ratos is considering a listing of Aibel.

The weekly navigator

Key takeaways: 1) Industrivärden sold its remaining stake in SSAB for SEK2bn, in line with our expectations; 2) Bure’s CFO shifted some of his shareholding from Bure to its SPAC ACQ Bure; and 3) Investor’s 4:1 stock split is due next week.

The weekly navigator

Key takeaways from last week: 1) Industrivärden reinvested part of its received dividends in Essity by acquiring 1.4m shares; 2) Kinnevik traded down 10%, which we attribute to a broader rotation out of pandemic ‘winners’; 3) Aker’s Q1 NAV was spot-on our estimate; and 4) Ratos continued its improved earnings momentum in Q1 – its seventh consecutive quarter of strong EBITA growth.