Monday, April 30, 2018

Helsinki Top 10 Over Billion Euro Companies

There are currently 36 companies listed in NASDAQ OMX Helsinki that exceed market cap of 1 billion euros. I ran my personalized screen to get top 10 list out of those companies.

I use a service provided by Valuatum.com via Pörssisäätiö to screen stocks listed in NASDAQ OMX Helsinki. I was not able to rank the following companies due to missing data: Nordea, Ericsson, SSAB and DNA.


Top 10


1 Orion

  • Score 2,6
  • Market cap 3,55 billion €


2 Citycon

  • Score 2,5
  • Market cap 1,68 billion €


3 YIT

  • Score 2,2
  • Market cap 1,26 billion €


4 Nokian Renkaat

  • Score 2,2
  • Market cap 4,6 billion €


5 Outokumpu

  • Score 2,0
  • Market cap 2,14 billion €


6 Sampo

  • Score 2,0
  • Market cap 24,94 billion €


7 Fortum

  • Score 1,9
  • Market cap 16,71 billion €


8 Elisa

  • Score 1,8
  • Market cap 6,15 billion €


9 Finnair

  • Score 1,7
  • Market cap 1,46 billion €


10 Sanoma

  • Score 1,7
  • Market cap 1,47 billion €


Average Score of all 101 companies in the research database: 1,5
Median Score: 1,4


Parameters used in screen (weight):
-------------------------------------------
 P/B estimate current year (13%)
 P/E estimate current year; next year (8%; 10%)
 Dividend yield estimate current year; next year (8%, 8%)
 ROA estimate current year (10%)
 ROI estimated 3 year average ending current year (8%)
 ROE estimated 3 year average ending next year (8%)
 Turnover estimated increase in 3 years ending next year (8%)
 Net Profit estimated increase in 3 years ending next year (8%)
 Gross Margin estimate current year (8%)
 Profit Margin estimate current year (8%)

The used parameters emphasize attractive valuation (31%), profitability in broad sense (26% weight), growth (16%) and dividend yield (16%).

The screen relies on estimates about future. Those combined with volatility of stock prices means that you should not try to chase screens like these (I don't). Ultimately any investment decision should be based on much more than just looking at the current numbers and estimates of future numbers.


Disclosure:
Author is long Citycon and Fortum.

Wednesday, March 14, 2018

PC is back?

Several stocks linked to personal computers (PC) have gained significantly in last 30 days or so:

Micron up whopping 47%
Western Digital up 28%
Intel up 18%

A bit more modest gains for Nvidia (up 7%) and AMD (up 3%).


What's going on here?

In my opinion atleast three tailwinds.

1) Market has revised pricing for Micron, Western Digital and Intel - rightly so.

As I wrote in December Micron, Western Digital and Intel seemed really inexpensive compared to peers and overall market. Especially so when considering how well these companies are positioned in their respective markets and with respect to growing demand for what they each produce.

2) Even though these companies contribute to much wider market, the "death of PC" narrative since iPhone and iPad came out has caused these companies to be priced at discount compared to the more "trendy" technology stocks.

3) Semiconductor sector overall continues to be red hot

The PHLX Semiconductor SOX ETF, which houses 30 chips stocks, has surpassed its record highs of March 2000 and is up nearly 16 percent in 2018. I recommend reading the linked article and watching the embedded video (contains Micron vs. NVIDIA commentary).

--

To drill a bit deeper to the "PC is back" theme, I would like to quote Jim Cramer from his recent "The personal computer is back" commentary:
 "The action off a return to growth of the PC, the steady burgeoning data center and the gaming business is now too great to ignore. This group is back and it's way too cheap. It's time to buy the breakout, as I believe the numbers are too low and the valuations are just plain out of whack with the rest of the stock market."

PC gaming has been somewhat shadowed by raise of mobile gaming and steady march of the consoles. Now it's raising back to focus thanks to e-sports and hit titles.

I am consuming games over all the mentioned platforms, but I have always liked PC gaming the best. It's the customizability of hardware and software, faster time-to-market of new games and cost of games when compared to console titles.


Disclosure: Author owns shares in Micron, Western Digital and Intel.

Thursday, January 4, 2018

Allocations for 2018

At the start of the year 2018 our portfolio was allocated on high level in pretty much same way is it was last year:

Stocks 98,7%
Gold 1,3%
Cash 0,1%

No bonds. We simply substitute bonds with quality dividend payers in our portfolio.


Geographical Allocation (stocks):

Europe 59,4%
North America 30,1%
Emerging markets 10,5%

Actually, place of incorporation is pretty meaningless for most corporations we have invested in. Most operate and sell globally.


Sector Allocation (stocks) - in order of weight in portfolio:

Technology (Other)
Financial
Technology (Semiconductor)
Healthcare
Clean Energy
Basic Materials & related services
Industrial Goods


Top 5 positions - in order of weight in portfolio:

Siili Solutions (Finland)
Berkshire Hathaway (USA)
Fortum (Finland)
Citycon (Finland)
UPM (Finland)


19,4% of all stock positions are done via ETFs out of which 7,7% are allocated to broad emerging market ETFs. Rest are sector-specific ETFs.

Monday, January 1, 2018

Portfolio performance 2009-2017


Happy New Year 2018!

It's once again time to check how our portfolio fared in the previous year against passive index investing.

The year 2017 was a mixed bag. Our global ETF and U.S stock positions delivered very good results. Micron with +82,36% gain was by far our best performing position and generally technology stocks were having a very good run. Our Finnish large caps were not having a good year, but luckily the small caps gained nicely (on average >30%).

Overall our portfolio gained 12,1% vs. benchmark investment 7,3%. The "benchmark investment" is an imaginary passive ETF that closely tracks the performance of MSCI all country world (ACWI) index in euros (more info here).

In terms of cumulative yearly gains, we are now 11,2% above the benchmark investment:

Portfolio performance 2009-2017.
 Note: "Difference" column uses exact values as input rather than figures rounded to 1 decimal that are displayed.

Cumulative gains of our portfolio (blue line) vs. benchmark investment (red line). 31.12.2008 = 100.


In the year 2017 we had very good tailwind from euro which raised against U.S dollar from 1,054 to 1,201. Our portfolio contains significantly more European stocks than the ACWI index and we measure gains in euros, and therefore, EUR/USD exchange rate matters a lot.

Going into 2018 we continue to be almost 100% invested into stocks. I will cover our allocation in the next post.

Saturday, December 23, 2017

Own positions compared to those of famous money managers

In continuation to my previous post I wanted to see how our positions in stocks listed in U.S. compare to those of 64 money managers followed by Dataroma.com.

Ownership count among the 'superinvestors':

Berkshire Hathaway Inc. (BRK-B): 16
General Electric Company (GE): 11
Intel Corporation (INTC): 3
Micron Technology, Inc. (MU): 3
Nokia Corporation (NOK): 2
Western Digital Corporation (WDC): 3

It's somewhat surprising how small the ownsership count is in the tech stocks I have selected. Especially in U.S. based companies like Intel, which are leading companies in their industries and trading at very reasonable valuations.

I also wanted to see which money managers have selected same plays.
Robert Torray is holding currently 3 out our 6 stocks: BRK.B, GE, INTC.

There are quite many which have 2 out of 6 common (five money managers). From those I raise the names that have selected min. 2 out of our 4 tech stocks, because those are the most interesting to me.

Robert Olstein of Olstein Capital Management has position in both INTC and WDC.
Meridian Contrarian Fund is long in NOK and MU.
David Tepper of Appaloosa Management holds both MU and WDC.

I think I just found more money managers to follow besides the two I mentioned in my previous post ..