Henrik_L’s Portfolio

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    Ì run a concentrate portfolio, normally between five and ten companies. After putting this handful of high-conviction cases in my basket I subsequently try to carefully look after the basket.

    Geographically my hunting ground is the Nordics, ranging from small to large caps. There are several thousands of listed Companies in the Nordic universe, and obviously a lot of great opportunities, and I think its “easier” to look in my own backyard. Business is local and so on..

    As most others I’ve tried several strategies over the years, but after I started in AF Gruppen I found out that best way for me was to find companies with the same-ish characteristics.

    Hence, I look for Companies that have:

    ·       Growth

    ·       Profitability and stable margins

    ·       High gross margins

    ·       High ROIC / ROCE

    ·       High cash conversion

    ·       Management and/or BoD with «skin in the game»

    ·       Management with good track record

    ·       Solid BS with low or no debt

    ·       Reasonably priced (even the best Company in the world can be a bad investment if you pay too much)

    Sometimes good investment ideas come from other great investors, by reading the newspaper or by running a screener. I try to look everywhere and hopefully this forum will lead to some new great ideas!

    The portfolio allocation currently is split 75% Norwegian listed companies and 25% in Sweden.



    Markus Enge


    How long do you typically hold positions and do you try to time the market?

    We have overlap on 1 position (KIT), excited for Q4 there. I owned Vistin quite long but sold waaaay too early. Since I did not understand the Metformin business (wish I had read your Vistin analysis earlier).




    The holding period depends. My stance is normally long-term but when the case changes dramatically or if better ideas appear, I reallocate. I’m usually fully invested.

    I have had AFG from 2012, adding every year to 2018 when I sold a bit to diversify. Kitron is my second-longest in terms of holding period, 2-3 years now. The rest I have bought during the last 12 months.

    Evolution is probably the only company I can say that I’m planning on holding forever.. although I know that will change some day as well J But it’s hard to find a business with the characteristics like EVO combined with such a strong underlying market. Although they are the largest company in my portfolio in terms of MCAP I see a loooong runway of growth ahead. US just started to open up and Asia is having huge growth although they have not really started here (no studios). Btw, I recommend this with the Chief Product Officer, Todd Haushalter; https://www.youtube.com/watch?v=L7B7ibU41i0

    In terms of market timing, I try to buy only when Mr. Market is depressed and there are bargains out there. I sold a lot to go cash when Covid first appeared in China. Though I was clever, but I bought into the market way to late again. Didn’t expect the fast rebound and the conclusion is that I should have remained invested.

    Talking about Mr. Market.. Fjordkraft is another example which got on my radar again (have owned this earlier) during the fall, and I started adding shares. The Company announced two large deals (Innenlandskraft and SNG in Sweden) adding more than 400’ electricity deliveries (+61%) from Q2 to Q4. In the same period the shareprice is more or less unchanged. M&A are always risky but the company has been doing some great accretive deals earlier so I trust the management on the recent ones as well.

    My take on the flattish shareprice was due to the complaint from Consumer Council’s proposing that some of their contracts were illegal. The Consumer authorities concluded that slight adjustments had to be made. Potentially bad for reputation short-term (slightly weak organic growth in Q4 but also impacted by less sales activity due to Covid) but the shareprice took to much beating in my view. It is still in the same range but Mr. Market can be depressed for a long time – or I could be wrong.. Let’s see who it is J

    I think KIT will have another solid quarter, the management are executing very well and they have benefited greatly from Covid. They stocked up on components earlier so let’s hope the component shortage recently haven’t affected them.

    You owned Vistin when they had the energy trading as well? I wasn’t comfortable and didn’t understand that division well enough. Once they shut it down, and the new majority owner came in, the case was much more appealing. Do you think it is too expensive to buy into at these levels?

    Please comment if you / anyone disagree or have another view of these companies. Conflicting views and opposite arguments are important to develop as an investor.

    • This reply was modified 2 years, 3 months ago by Henrik_L.


    Markus Enge


    AFG: is on my watchlist.

    EVO/Kindred: P/E over 20 goes in my too difficult pile. But I see other smart investors like Edd (EVO) and Thomas Nielsen (both) have those as some of their largest investments, so my guess would be that its a good choice.

    For Fjordkraft the reputation worries me a bit. I am a customer of the company myself, and the technical solutions, etc are good but seem a bit too eager to adjust the prices after the initial period and their default option to charge 39 NOK for the paper invoices annoys me. And more “transparent” competitors like Tibber seems to be gaining ground. Currently, I guess Tibber is getting the “worst” customers that are quite price sensitive and changes often, but if the “loyal base”(like me) starts moving it might affect margins.

    I’ll get back to Vistin in your review thread.

    Your portfolio allocation looks like my ideal allocation, but somehow I end up with loads of 2% positions. Do you normally add to the positions even if the stock increases after purchase?




    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, 3 months ago by Henrik_L.
    • This reply was modified 2 years, 3 months ago by Henrik_L.
    • This reply was modified 2 years, 3 months ago by Henrik_L.


    Markus Enge


    Did not know they had purchased Gudbrandsdal Energi. I guess since they have quite some brands and so large market share they have many ways to play their hand. Like Telenor in Norway.

    I start at quite small positions normally and the idea is to add more when I get even more familiar with the companies. However, I often find it hard to purchase more at higher prices.

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