Sunday, October 30, 2016

Helsinki Top 20

I use a service provided by via Pörssisäätiö to screen stocks listed in NASDAQ OMX Helsinki. I use the screen periodically to check where our holdings stand relative to other companies listed in Helsinki. Naturally I am also continuously screening for new investment ideas.

The results of my personalized screen are disclosed below.

The Top 20 list continues to contain many small companies. Many of them are in investment/banking business (e.g. all in Top 6 are such).

Our positions are marked with prefix ">".

Rank Company (Score)
#1 Privanet (3,5)
#2 Investors House (3,0)
#3 eQ (3,0)
#4 Orava Asuntorahasto (3,0)
#5 CapMan (2,8)
#6 Suomen Hoivatilat (2,8)
#7 Incap (2,7)
#8 Technopolis (2,5)
>#9 Citycon (2,5)
#10 Detection Technology (2,3)
#11 Revenio Group (2,3)
#12 Raute (2,2)
#13 United Bankers (2,0)
#14 Sponda (2,0)
#15 Orion (2,0)
#16 Sampo (2,0)
#17 Taaleri (2,0)
#18 Nokian Renkaat (2,0)
#19 Okmetic (1,9)
#20 Ponsse (1,9)


>#24 Siili Solutions (1,8)
>#39 Telia (1,5)
>#46 UPM (1,4)
>#58 Fortum (1,3)
>#82 Nokia (0,9)
>#89 Metso (0,8)

Out of my positions Fortum, UPM, Nokia and Metso have gone down in both score and rank significantly since last time I checked (April 30th, 2016). Still, overall the positions seem to be above average rank and score wise.

Except for Nokia, Citycon and Telia my positions are higher than they were in April 30th. UPM is significantly up from where it were. This partially explains the changes. However, I fear also the forward projections have been melting down for some of these companies.

Average Score of all companies in the research database: 1,3
Average Score of our positions: 1,5

Median Score 1,2
Our positions that have higher score than median: 5 out of 7

Worst Score 0,1 (#119 Nextim)

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.