All data on Nordic companies are gathered from Borsdata.se. I highly recommend them.
The following watchlist contains my comments about the value in Short Sea Shipping, Danske Bank, Altria, Philip Morris, International Flavors and Fragrance, Southern Company, Anheuser Busch InBev, BMW, J.M.Smucker, Starbucks, Kopparbergs, and Europris.
I actually added to the emerging market index because I believe the recent drop might be a nice time to add. The index is down 10% this year and the Hong Kong Exchange is down 20% from the top (bear market?).
Short Sea Shipping
“The modern terms short sea shipping, marine highway and motorways of the sea refer to the historical terms coastal trade, coastal shipping, coasting trade and coastwise trade, which encompass the movement of cargo and passengers mainly by sea along a coast, without crossing an ocean” – Wikipedia
Reasons for looking into Short Sea Shipping:
- Analysts believe that in a 5-year timeframe, the bear case for Short Sea Shipping is -8%, 38% is mean consensus, and 62% is a high-value target.
- What has changed is that banks are finally ready to offer loans so that they can buy ships in the Short Sea Shipping segment.
- By 2050, Short Sea Shipping will play a strong role in reaching the EU transport goal of reducing 60% of greenhouse gas emission generated by transport, and by 2030 there will be a shift of 30% of road freight over 300 km to other modes.
- Lastly, the major shipping firms have chosen to just dump the ships which have caused a massive drop in the supply. This is due to the new climate law which forces them to pay $300,000 to meet the requirements.
The banking sector is changing. It’s not about money anymore. It’s about technology and trust me, things are evolving.
The simplest form of machine learning is RPA or Robotic Process Automation. This technology is changing the way banks operate. Basically, the technology involves creating a program which replaces the easiest tasks we humans perform. Every task binary task is being replaced by RPA. Think typing Yes or No to emails and so. The point? It is saving banks a ton of money, and the workforce is decreasing fast.
Reasons for looking into Danske Bank:
The price of Danske Bank has dropped due to a money laundry scandal. But investigations haven’t been able to show any clear evidence.
- P/B 0.92
- Yield 5.9%
Remember Volkswagen? Somehow, scandals in the stock markets tend to be hyped, and people sell after the news is priced in. I tend to like scandals, and I am often keen on adding shares even if everyone is telling me that it is going south.
Altria and Philip Morris
I think both firms are still valuable. I send you to my article about Philip Morris here. http://www.stockles.com/2018/08/24/recent-purchase-philip-morris-international/
International Fragrance and Flowers
IFF is a wonderful company which is trading at a very interesting price. The firm just broke the SMA20 and the SMA50 and is boosting a very attractive yield along with great dividend growth.
- Insider Own is at 87.50%
- ROE is 17.10%
- ROI is 14.40%
- Gross Margin 43.20%
- Oper Margin 17.20%
- Profit Margin 8.30%
- Payout Ratio 72%
Anheuser Busch InBev and BMW
Anheuser Busch InBev is trading at a very interesting price. But the Belgian tax makes me say no this time. I encourage you to take a look
BMW is also another high-quality firm. The only problem is that the industry is very cyclical, which is something I don’t like at all.
Another utility trading at a very interesting price. The high yield along with the pretty safe dividend seems like a good option if one is looking for dividend income.
I really like Starbucks and operate with an intrinsic value at $71. I would like to purchase Starbucks below $60.
Read more here about Starbucks here http://www.stockles.com/2018/07/30/starbucks-in-asia/
J.M.Smucker, Kopparbergs, and Europris.
J.M.Smucker is trading at a forward P/E at 12.92 and yields 3%. The ROE has been high for a long time which is something I really like.
I observed the short float is 8.5% which could mean that analysts know something that the market isn’t fully aware of.
Kopparbergs is now down from its peak to around 245 SEK after the selloff due to a somewhat weak report. People thought that Kopparbergs would make a ton of money because of the long warm Nordic summer, and they did. But not as much as people hoped.
I am expecting Kopparbergs to trade around 180 to 200 SEK in the near future and will add.
Europris is down after another weak report. The stock is trading at around 20 NOK while several investment firms believe that the stock should be valued close to 34 NOK.
I think the stock is oversold, and I don’t like the weak reports.
What stocks are you looking at? Any thoughts? Let me know. Also, remember to take a look at Borsdata.se