Scandinavian Opportunities – Corporate turnarounds

There are three companies that I like in Scandinavia that are restructuring their business. They have one common feature. They already told us, that they got new sales partnerships. The partnerships have not transferred into sales, yet, but there is a very high probability that they will. In all three cases, when this happens the share price should multiply.

NEXT Biometrics – I enclose the thesis below. It is well summarized and easy to understand. In summary that company has signed 16 sales agreements that are yet to transfer into sales orders. Pareto estimate that when this happen the quarterly revenues should increase by 400%. They expect this by the Q4 this year. If that happens the share price should increase three to four times as well. I find it very attractive. Since the article the company announced a new partnership with European major with 20 bil EURO sales. Just this company could multiply the revenues of NEXT. I am long NEXT and I am very bullish.

Hofseth Biocare – very similar situation to NEXT. The company was processing Salmon waste for pet feed. They have remodeled their technology and now they stop supplying pets and focused on humans. They sell Salmon Oil and Salmon protein. Salmon protein is to be used for protein human foods. Last week they announced the game changing partnership – they signed contract with protein food producer Garden of Life (owned by Nestle). They already shipped the first protein cargo to Garden of Life that is planning to lunch the product in the US in Q3. Again just this contract has a potential to multiply HBC’s revenues and its share price. On the top of it, I found that the company is now selling its Salmon oil on Amazon, in 400 Lidl stores in Germany and in 1000 stores of Cosco USA. The company indicated in the past that they plan to do it, but for some reason they did not announce it. Fortunately we have Google that can give us the information. Look at the below link at an article that again summarizes the story. After the above is achieved the company is planing to lunch medical supplements. They got the first FDA approval this year. When this achieved the margins will jump further.

Norske Skog – it is the second largest paper company in the world. What the market does not appreciate are two things: it has a green product portfolio that has a value euqal to its current market cap. So either the market gives its paper business zero value or the market does not recognize the green portfolio. I believe that it is the later. On the top of it the company is now converting part of its paper production into Green Packaging production, that can be used for example for paper plates to replace plastic in fast food chains. The product has triple margins vs the paper production. The market does not appreciate this either. I speak to the company and they do plan to inform the investors on the value creation opportunity. See the below link for description of the value creation.

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