Some companies seem optically cheap, but never seems to get recognition from the market.
A common reason behind this classic value investing trap, is reinvestments into property, plant and equipment.
Teqnion is a small serial acquirer from Sweden. They have experienced difficulties on a subsidiary level for quite some years. Management has even made som mistakes regarding capital deployment as well as some governance issues.
Despite these concerns, I believe in a strong incremental return on capital of around 15%. The reinvestment rate sits at 100%, and corresponds to a shareholder CAGR of 15% if the multiple stays flat. This may be an opportunity to get in on a long term compounder in its absolute infancy, if you can stomach the risks.
Not financial advice.
Paradox is a developer and publisher of strategy games, with many famous legacy games.
In this episode, I explain some of the nuances behind gaming accounting, and the short-comings of traditional accounting when it comes to intangible assets.
Paradox is a quality, long term compounder. I fore-see a bumpy ride ahead, due to some potentially failed releases. This could mean opportunities to buy a great company experiencing some short term problems.
Not financial advice
Quick recap of the solid company performance from Generic in H1, despite poor stock performance. A valuation update at the end.
Disclaimer, this is not financial advice. An investment carries severe risk of capital loss.
Betsson AB is an established player within the online gambling sector, led by a supreme capital allocator in the owner-operator Pontus Lindwall. It trades at a market cap of 22 billion SEK, or approximately 2 billion USD.
At a share price of 155 SEK the company trades at a FCF-yield of 10%, while growing earnings double digits. This is due to a looming regulatory risk, which could severely affect current earnings power.
However, I believe that despite the risk, the current multiple of 10 times P/E is so low, that risk/reward is very promising. I foresee a shareholder CAGR of above 15% even with conservative estimates for future growth and negative regulatory events.
Not financial advice, and an investment in Betsson AB carries severe risk.
A quick recap of the strong performance of Medistim in H1 2025, and a valuation update.
Some companies always seems to trade at a low multiple. Charlie Munger hates that kind of business.
In this episode I go through the working capital cycle of a product company, and explain why they deserve a low multiple.
If I could go back in time to understand something early in my investing career, this would be high on the list.
Investors seems to be missing the forest for the trees. Short term noise have built an impression that Evolution deserves to trade at 12 times earnings. But remember, the P/E multiple is not only a component of growth.
Market valuations of sectors varies over time, and there is no permanent anti-ESG underperformance. If so, any quant with a screen would outperform the market.
I foresee a clear path towards multiple expansion, despite modest expectations for company performance. In this analysis, I try to explain what the returns could look like over 5 years.
A growing and stable internet service provider from Sweden. The company is founder-led with extreme earnings stability for such a small company.
The company is setting up for international expansion after having built a stable earnings base in the Swedish market.
Thanks for listening. Not financial advice
One cannot simply compare a swedish serial acquirer to another. They own vastly different assets, corresponding in vastly different expectations for organic growth.
Furthermore, some companies has a proven track record when it comes to capital allocation. Bergman & Beving is the OG in this regard.
Putting swedish serial acquirers in a spreadsheet comparing P/E multiples or other measures without context should be considered a sin.
A best in class IT concultancy firm from Norway. At a market cap of 800 MUSD, this quality compounder has great opportunity to continue outperforming the market.
The company is trading at a FCF-yield of 5%, and growing revenues 10% annually. Without the need to retain earnings in order to grow the investment could yield a 15% annual return, with very low risk of terminal capital loss.
There is risk of multiple compression in the near term as it trades at 20 times earnings. In such an event, Bouvet could be a fantastic opportunity.
This is not financial advice.
When valuing a cyclical wholesale retailer one cannot simply apply a multiple. At depressed earnings after a post-covid bull-whip effect and economic downturn, AOs future earnings power is understated in my opinion.
The market's belief in a reversion to the mean doesn't factor in the substantial investments in IT and infrastructure made by the company pre-covid. This makes AO an attractive investment prospect with minimal risk of terminal capital loss.
$AOJ trades at an estimated forward FCF-yield of 10%, having historically grown FCF 15% per year. I foresee a solid shareholder return of about 15-25% per year for the next 3-5 years, when the increased earnings power is recognized by the market.
Not investment advice, but merely my take on an interesting company.
A capital efficient micro cap staffing company from Sweden. The company doesn't need to retain earnings to grow, but still grows 10% annually.
Trading at a FCF (and dividend) yield of 5%, it's destined to deliver shareholder returns of 15% annually. The company has a very low business risk, due to a simple, yet brilliant business model.
Investing doesn't get any more boring (nor better) than this.
Not financial advice.
Medistim ASA is a medical techonology company with a near monopoly within their niche and a razor-blade business model.
In a more than 50% draw-down due to macro-economic factors, this is a secular compounder available at a reasonable price. At a 4% FCF-yield, the company is in position to deliver double digit growth for the foreseeable future. The company has great margins, 30% ROE, and no need to retain earnings in order to grow.
Not financial advice, just my opinion on an interesting company.
A promising micro cap software as a service company from Sweden. At a market cap of 70 MUSD it trades at a FCF yield of 3% while growing ARR 20%. The company retains no earnings, grows profitably and has a founder-led management team.
No financial advice, merely my take on the company.
A quality micro-cap technology company from Sweden. The company grew 24% in 2024, and does so without the need to invest a lot of capital or retaining a lot of the earnings.
The company has a scalable business model, and is expected to grow double digits for the foreseeable future, trading at a FCF yield of more than 3%. This may be a secular compounder with substantial upside.
No financial advice, and only my opinion about the company.
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