Weekly NAV update

The main takeaways from last week include: 1) Investor via Patricia Industries acquired automation company Piab; 2) Latour continued its add-on acquisition strategy by acquiring Johnson Level & Tool for Hultafors, yet its shares traded down 7%, thus resulting in a 5% discount increase; and 3) Lundbergs and Mr. Lundberg increased their holdings in SHB, acquiring 3m A-shares combined. Our sector top picks remain Investor and Kinnevik.

Weekly NAV update

We recently we raised our target price to SEK470 (460) and reiterated BUY for Investor due to its Q1 earnings, which supported our positive view of the case for further recovery signs in Patricia Industries. Other sector highlights from last week include: 1) significant discount increase in Industrivärden (currently at 18%); and 2) Ericsson, comprising 5% of Industrivärden’s portfolio and 4% of Investor’s, soared 15% due to strong margin improvements, signalling that cost cuts are material...

Weekly NAV update

Industrivärden kicked off the Q1 earnings season last week with limited surprises. It highlighted a continued focus on value creation in the existing portfolio whereas deleveraging remains a key focus area. Other sector highlights from last week mainly revolved around Kinnevik, where GFG reported its Q4 2017 figures while it also increased its ownership in Livingo. Our sector top picks remain Investor and Kinnevik.

Northern Lights

Industrivärden (Hold, TP: SEK210.00) - Continued focus on deleveragin...

Over the past two years, value creation has taken place in its existing portfolio holdings rather than new investments. We expect this to continue in 2018, as deleveraging will remain a key focus area. We still like its transformation story, and while the 5%-discount increase YTD lends some valuation support, our updated view of its portfolio holdings offset this. We reiterate our HOLD recommendation, but have lowered our target price to SEK210 (220).

Weekly NAV update

Last week our sector top picks Kinnevik and Investor had the best share price performances. While news flow was limited, we highlight: 1) Investor’s unlisted Patricia Industries completed the acquisition of healthcare holding, Sarnova, with an 86% majority stake; 2) Kinnevik holding Qliro’s shares (0.5% of the portfolio) lost 11% after it issued a profit warning; 3) narrowing discounts at Kinnevik and Investor; and 4) Industrivärden’s Q1 results are due out Monday, 9 April.

Weekly NAV update

In a volatile OMXS, the sector recovered from the previous week’s negative share price performances. While news flow was limited this week, we highlight: 1) dividend inflows increasing sector discounts slightly; 2) Kinnevik, Latour and Industrivärden traded strong; 3) Kinnevik’s discount narrowed by 2.4%-points; and 4) Latour’s holding in Tomra jumped 13.7% on plans in the UK for a plastic bottle deposit scheme. Our sector top picks remain Kinnevik and Investor.

Weekly NAV update

Key takeaways from last week: 1) the downbeat OMXS had an adverse impact on the valuations of the sector as our entire coverage saw increased discounts; 2) Kinnevik’s holding MTG announced that it will split into two companies, in line with our most likely scenario; 3) Latour continues to build its stake in Alimak; and 4) Investor CEO Johan Forsell again highlighted that elevated asset prices make it challenging to add new companies to its portfolio. Our sector top picks remain Kinnevik and In...

Weekly NAV update

Our top picks Kinnevik and Investor had the strongest share performance in the sector last week, outperforming the OMXS30 by 2.4% and 2.5%, respectively. Key takeaways from last week: 1) Investor acquired a new healthcare company in Patricia Industries; 2) Latour continues to build its stake in Alimak; 3) Kinnevik-owned Home24 plans an IPO in three months; and 4) New investment director and sector head of TMT in Kinnevik.

Weekly NAV update

Last week we hosted Latour’s CEO Jan Svensson for a lunch presentation. We found his impression of the company’s long-term value creation convincing. Moreover, Industrivärden’s COB Fredrik Lundberg said in an interview that it will remain a long-term investor in Volvo (20% of the portfolio) and that it does not expect an attractive enough bid to consider giving up its long-term plan for the company. Our sector top picks remain Kinnevik and Investor.

Weekly NAV Update

A downbeat OMXS in the past week, weighed down by US tariffs and trade war speculation, acted as a dampener on the holding companies’ performance. As a result, we saw discount increases across our entire coverage, with the exception of Kinnevik, whose discount narrowed by 3% as its shares stood relatively firm, while key holding Zalando (37% of the portfolio) traded down 11% as growth initiatives will continue to weigh on profit. Our top picks remain Investor and Kinnevik.

Weekly NAV update

Lundbergs’ Q4 report was free of surprises, and as the substantial premium to NAV valuation seen in 2017 has continued to abate in combination with a less muted portfolio view, we upgraded our recommendation to HOLD (SELL) as our 12-month forward NAV could bear a 5% discount at current share price levels.

Weekly NAV update

The main takeaways in the sector from last week were: 1) Kinnevik hosted a sell-side lunch with its new CEO, giving a confident impression of its strategic priorities; 2) Latour yet again reported an impressive quarter, but we remain cautious on its growth prospects in the unlisted Industrial Operations and the upside potential in the shares; 3) Investor’s discount is still too high; and 4) Lundbergs continues to build its position in SHB. Our top picks remain Investor and Kinnevik.

Weekly NAV update

Hot inflation data and rise in US Treasury yields had had a negative effect on the sector in the past week as it underperformed the OMX index by 2.1% on average. As the holding companies have benefited from strong and liquid equity markets with historically low discounts to NAV, we noted discount increases across our whole sector coverage in the past week. Our top picks remain Investor and Kinnevik.

Northern Lights

Industrivärden (Hold, TP: SEK220.00) - A fairly valued outperfomer

We appreciate that Industrivärden proposed to raise the dividend to SEK5.5/share. CEO Stjernholm highlighted that continued deleveraging will be a priority; hence we see limited room for new investments near-term. We like its transformation story, but see limited upside potential in the shares given the current discount to NAV of 10.2%. We reiterate our HOLD recommendation, but have raised our target price to SEK220 (210) to reflect our updated view of its portfolio.

Weekly NAV update

In the first busy week of the Q4 earnings season, the holding companies marginally outperformed the OMX index, as meeting not beating expectations weighed on the portfolio performances. Once again, Kinnevik was in the spotlight as MTG announced the divestment of Nordic Broadcasting to TDC. Following its more active ownership at the start of 2018, we believe it should receive more recognition from the market, resulting in a narrowing discount. Our sector top picks remain Kinnevik and Investor.

Weekly NAV update

Investor initiated the Q4 earnings season in our sector coverage with a solid report. Most notably we see signs of improvements in Patricia Industries, which should lead to a more positive sentiment towards the shares. The sector outperformed the OMXS30 index by 0.3% last week, mainly driven by Kinnevik and Lundbergs. Our sector top picks remain Kinnevik and Investor.

Discount to go with the flow

As the Q3 report was free of surprises, we continue to like the transformation story in Industrivärden. However, the share price upside potential has fallen as the discount to NAV has shrunk to 6%. That said, we reiterate our HOLD recommendation and SEK210 target price (upgraded from SEK185 in our sector book published earlier this week) as we believe it will continue to realise value in its holdings under the firm grip of CEO Stjernholm and COB Lundberg, which combined with the sector re-ratin...