Reply To: Henrik_L’s Portfolio

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I had it the same way for EVO and was hesitant to buy in due to valuation. I followed the company for some time and my view changed. I bought the majority at kr 650 and added a bit more at 800kr early in January.

I completely follow you on Fjordkraft and I will follow the organic growth / churn very closely in the future. I am a customer as well, through Gudbrandsdal Energi.

Churn tend to increase when electricity prices go up, everybody is all of sudden interested in their electricity bill. They have also suspended door-sales and agent activity is down (stores closed etc) so my guess is negative organic growth short term. But in my view, this is reflected in the current shareprice.

Earlier in 2020 I was a bit sceptic to growth going forward as they are market leaders in Norway (27-28 % market share) and the Competition authority will permit maximum 35 % market share. When they entered Sweden / Finland through acquisition of SNG the runway is all of a sudden much longer.

When transferring the customers to “The Fjordkraft factory” they get solid economies of scale and can realize significant cost synergies. Combined yearly EBIT in Innenlandskraft and SNG are just short of MNOK 150. Management guidance on the combined companies are MNOK 200 going forward. Take that with a pinch of salt, but it gives an indication. And historically they are usually delivering above their guidance. Same with KIT btw.

AFG I have been adding every year but that’s due to the employees share prog. In general, if the story is intact or even improving, I can add more. Like EVO mentioned above. It’s more down to if I think adding to existing positions are a better option than other opportunities.

When purchasing into a new company I start adding bit by bit. It’s hard to hit bottom so I try to even it out. Risk management..

How is your strategy when buying into new companies? All at once or step by step? And what about adding to existing positions?

  • This reply was modified 2 years, 7 months ago by Henrik_L.
  • This reply was modified 2 years, 7 months ago by Henrik_L.
  • This reply was modified 2 years, 7 months ago by Henrik_L.