In 2020 I’ll publish montly reports of my portfolio, instead of the monthly dividend income update as last year. For the first month of 2020 there has been several changes, and some of them I have to admit was mistakes. But, I’ll learn from these mistakes and I do stand by my decisions.

The portfolio gained 1.8 % in January 2020 and lagged the benchmark index which gained 3.59 % (VINX Benchmark Net Index NOK). Nevertheless, the past years I’m way ahead of the benchmark and trust that the portfolio will bounce back.

Dividends in January:

The dividends in January was paid out by Transalta Renewables and Brookfield Renewable Partners (I use payment date in my records, and not ex. div date). Total dividends received was NOK 535, up from NOK 146 last year. Last year I only received dividend from Eolus Vind, which was sold in mid-January this year.

Dividends per month increases year over year

Investment Journal:

January turned out to be a very active month. A total of 8 transactions was made, and I’ll shortly go through them below.

Transactions in January


Valmet Corporation – out of the woods – (write up)

Summary: I find the current share price to be too conservative for this quality company and expect that the return in the coming year will come from multiples expansion (from PE 16.6 to 18), dividend of 3.5% (EUR 0.75 / 21 EUR per share) and future earnings growth (5 year historic earnings growth of CAGR 33%).

Chr. Hansen Holding A/S is an excellent defensive stock, with a convincing, recession-resistant portfolio. The company operates within food cultures, enzymes, natural colors, plant and animal health and probiotics. High return on invested capital, nice free cash flow yield and high entry barriers was main reasons for investing in this company.

Novo Nordisk is a global pharmaceutical company that is a market leader in the treatment of diabetes. It has strong positions in haemorrhage, obesity treatment, growth hormone therapy and women’s health. Novo Nordisk has a broad and innovative product portfolio and benefits from economies of scale related to the development, production and sale of diabetes products.

I also added to my positions in Sparebanken Vest and Securitas AB during the month.

So, over to the mistakes; my sell decisions. In hindsight the decision to sell Eolus Vind AB and Scatec Solar proved to be bad decision. I sold both companies prior to their quarterly reports. They have greatly outperformed the market subsequent to my exit and left me baffled over their share price performance. I sold my position in Scatec Solar since, in my opinion, the risk in their project pipeline has increased (emerging markets e.g. Vietnam) and that the risk / reward in the company was low. Eolus on the other hand disappointed me in their reporting in Q4 (23 October 2019) with no extraordinary dividend, low project backlog visibility and cost overruns on latest projects delivered. Conclusion: I missinterpreted the amount of fund inflow to companies with exposure to renewable-companies.

Sold Eolus at 113 SEK per share
Sold Scatec Solar at 130 NOK per share

NIBE Industrier AB on the other hand proved to be a better sell decision. The company was bought in October for 120 SEK per share and since then the share price development was straight upwards, and I sold at 175 SEK per share to make place for Valmet Corporation and Chr Hansen.

The focus in February will be on the quarterly reports for my remaining holdings which did not report in January. I love this time of the year as most dividend hikes and payments are announced in this period.

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I’ve been looking at the company for a while now and today I initiated a position in an industrial I argue has a conservative pricing.

Summary: I find the current share price to be too conservative for this quality company and expect that the return in the coming year will come from multiples expansion (from PE 16.6 to 18), dividend of 3.5% (EUR 0.75 / 21 EUR per share) and future earnings growth (5 year historic earnings growth of CAGR 33%).

About the company: Valmet Oyj is a Finnish company with an industrial history over 200 years. As a standalone listed company, the history stretches only back to 2013, when it was spun off from Metso Corporation. Valmet is the leading global developer and supplier of technologies, automation and services for the pulp, paper and energy industries.

Business overview:

The company has four segments:

  • Services
  • Automation
  • Pulp and Energy
  • Paper
Valmet segment overview

At Valmet, Services and Automation are considered to be “stable” businesses, as they represent rather stable and slightly growing markets that are driven by the size of the installed base and mill operating rates. Currently, the increasing consumption of board, tissue and pulp in particular, as well as demand for bioenergy, are boosting production growth, which is creating new demand for Valmet’s services and automation (source: Valmet Investor Relations)

Pulp and Energy and Paper business, such as board, paper and tissue machines, pulp mills, and biomass power boilers are referred to as “capital” businesses. They are driven by new investments in machinery and mills, which makes these businesses more cyclical and volatile compared to the more stable services and automation businesses (source: Valmet Investor Relations)

Market leader in the growing market of converting renewables

Pulp & Paper industry: Paper and packaging experiencing several “megatrends”, which are important demand drivers for new packaging and consumer board products.

  • Urbanisation,
  • Digitalisation (headwind for traditional paper and print industry)
  • A rapidly growing global middle class,
  • Eco awareness
  • Population growth
  • Booming e-commerce


The current dividend yield is ~3.0 % and has increased since the IPO in 2013. The current payout ratio is 50.2% and the ratio has declined since the IPO, which is a result of increased earnings and growth. Net debt / EBITDA is 0,69 and the net debt is 7.7 % ( Net debt shows how much net interest-bearing liabilities in the company in relation to total assets ). The dividend safety is satisfactory, and I expect an increase for 2019 to EUR 0.75 per share (increase of 15%).

Valmet dividend history and payout ratio


The stock is currently trading at P/E 16.6 (P/E 2020E is 13.7 Source: Bloomberg consensus) which is fairly conservative for this company on a historical basis and compared to peers (e.g. ABB, Honeywell and other industrials). I expect a return on my investment of ~45 % and a share price of EUR 30. This is based on the current conservative pricing, which gives room for multiples expansion (based on historic multiples and peers), combined with expected earnings growth and a dividend yield of 3%.

Technical analysis: The share price bottomed out at 15.6 EUR and the trend is upwards. Support is found around 19.8 EUR and resistance at 21.5 EUR. 10 day MA has crossed 50, 100 and 200 days MA and 50 days MA has crossed 100 and 200 days MA.

Investment Checklist:

Valmet scores 86 points in my investment checklist, which is above my treshold of 80 points.

Investment Checklist Valmet


  • Lower pulp prices may reduce the willingness to invest in Valmet’s products
  • Weaker economic outlook in the overall economy
  • Climate change may cause increased damage to the forest from the bark beetle in Central Europe.
  • Project-specific risk (project cost estimation, scheduling, quality and performance)

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Established in Arendal in 1962, Kitron has a long track record within the manufacturing of high-complexity, high-reliability electronic products. It is expanding its global presence with manufacturing facilities in Norway, Sweden, Lithuania, Germany, Poland, China and the U.S. Its customers outsource manufacturing of electronic circuit boards and related services to improve flexibility, cost efficiency, accuracy and innovation. The company has a reputable customer base, including companies like Kongsberg Gruppen, Northrop Grumman, Saab, Volvo, Lockheed Martin, ABB.

Segment overview

The company operates within five different segments; Defence/aerospace, Energy/telecoms, Industry, Medical devices and Offshore/marine. Below is an overview of split in revenues per segment.

Source: Company presentation Q3


The company’s dividend history is not too long, but they have paid a consecutive dividend the past five years and has a high dividend growth rate (extraordinary dividend of 0.2 NOK paid out in 2018 based on 2017 financials). Kitron’s dividend policy is to pay out an annual dividend of at least 50 % of the company’s consolidated net profit before non-recurring items. The EPS as per 30 September 2019 is 0.55 NOK and it is estimated that the full-year EPS will be around 0.8 NOK.

Today the current yield is around 4.3% (share price 9.38 NOK), but I expect that the dividend for the fiscal year 2019 to be 0.50 NOK; implying a forward yield of 5.3%. The payout ratio is approximately 55%, which I believe is OK for this type of company.


Growth and EBIT-margin

On the latest Capital Markets Day (CMD) the company launched a revenue target for 2025 of NOK 5 billion and EBIT margin of 7%, with potential M&A adding upside. This implies an EBIT’25e of NOK 350m, representing a solid CAGR’19-25e of 10% (Source: Kitron CMD and Pareto Equity Research).

Source: Kitron CMD
Source: Kitron CMD


The stock price for Kitron ASA has since a low of 1.51 NOK per share increased to today’s price of 9.38 NOK per share. This increase is well justified due to the strong revenue growth and improving EBIT-margin, and there isupside potential if the company’s targets are reached. These are the key drivers for value creation for shareholders and one should expect accretive acquisitions going forward based upon the communication to the market by the management on the Capital Market Day.

Comparing EV/EBIT to its closest Nordic Competitors; NOTE AB and Scanfil Oyj, it is trading at a premium. EV/EBIT for Note is 11.6, while Scanfil trades at 10.3.


Disclaimer: I hold a position in Kitron ASA.

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Initiated a position in Boule Diagnostics at 49.50 SEK on 1 October 2019. In this post you’ll find a short intro to the company and the reason why I added a MedTech company to my portfolio.

About the company: Boule Diagnostics AB is a global diagnostics company that develops, manufactures and markets instruments and consumable products for blood diagnostics. The company serves hospitals, clinics, laboratories and companies within blood diagnostics, in both human and veterinary haematology. Haematology (first difficult word) is the study of the physiology of the blood.

Boule operates mainly in the decentralised haematology segment, which consists of smaller hospitals, clinics, laboratories and healthcare centres.

Megatrend: Growing total world population, increased age of world population (geriatric, second difficult word), increased digital analysis of blood tests (accuracy and speed of analysis) and humanisation of pets are all megatrends in which the company will benefit from.

The video below is from a company presentation in September, and gives a lot of information about the company, future prospects and their products.

Dividend: Currenctly trading at a low yield, 1.2 % as per 1 October, but the past dividend growth and expected future dividend growth is great. I did not invest in the company solely based on the dividend prospects, as I believe most of the expected total annual returns will come from earnings growth (expect 7% CAGR going forward) and a multiple expansion due to the depressed share price the past year.


Share price: The share price has plummeted due to the american FDA putting their production under scrutiny back in 2018. There has not been any news recently regarding this issue, but there is expected that a clarification will come in Q4 2019. Nevertheless, the share price seems to have bottomed out.

Source: TradingView

An introduction to my investment journal has now been uploaded. Here you can track all my investment decisions!

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