Pareto Securities Monthly Portfolio Ideas for August

Every month Pareto Securities publishes their portfolio ideas for Norway and Sweden. They select ten stocks for each market. Below is our selection from that portfolio. Their Norwegian portfolio ideas outperformed the benchmark by 30%, Swedish portfolio by about 1%. I selected below the ideas we like most from the 20 stocks.

We also published our Top Ideas for August last week. Link is below.

Ideas selected from Pareto Monthly Portfolio Update for August for Norway and Sweden

Product tanker rates are going through the roof as the Ukraine war is sending much-needed diesel volumes long-haul while inventories are running dangerously low. Hafnia’s Q2 bookings put them at run-rate P/E ~2.5x as MRs just finished their best quarter since Q4’04. Q3 is starting out on a higher note than Q2 did and bookings from peers suggest Q3 EPS of USD 0.7 for runrate P/E 1.2x in HAFNI. Consensus is nowhere near this and we believe the Q2 report later in August will be an eye-opener, with Q3 earnings alone set to dwarf the mayhem we saw during 2020. Our current NAV of NOK 39 is pushed to NOK 50 by YE’22 on our estimates with values up 10%. Momentum and underlying markets are firming under the radar as refinery runs are set to increase, and Hafnia is perfectly positioned with a large and healthy levered fleet. BUY / TP NOK 60

We estimate Aker Horizons mark-to-market SOTP at NOK 27/share, which implies that it trades at a 36% discount. We find this attractive for a company that has proven its ability to create value by actively managing its portfolio and securing strong partnerships to drive further growth. In addition, Horizons has materially strengthened its investment capacity that now exceed
NOK 10bn of cash equity (incl. MRP). We think this is underappreciated by the market and a differentiator to many peers. BUY / TP NOK 30

Calliditas Therapeutics – Buy, TP SEK 300
In July, Calliditas Therapeutics received European approval for its first-to-market drug Nefecon in the rare kidney disease IgA Nephropathy – which came one month earlier than expected. The drug will be sold under the brand
name Kinpeygo by Calliditas’ partner STADA, a large German Pharma company. Calliditas has already launched the drug (brand name Tarpeyo) in the US and noted a continued acceleration of sales in the Q1 call for April and first half of May. In the coming months, we expect the stock to continue outperforming the market, especially towards the Q2 call in August.

Vicore Pharma – Buy, TP SEK 97
VICO is trading +100% YTD and is poised to continue much further in the coming two months. Why? We expect (positive) major catalysts around end of August / early September. These include follow-up data from the company’s trial in idiopathic pulmonary fibrosis (IPF) patients and also the readout of the COVID-19 phase 3 study. Drug sales in IPF reached around USD 4 bn last year, comprised of two drugs, one from Roche (Esbriet) and one from Boehringer Ingelheim (Ofev). Despite the two drugs on the market, the median survival after diagnosis is 3-5 years (the drugs are only slowing the decline in lung function). Vicore’s drug, for the first time ever, has shown gain in lung functions in IPF patients that reached the hundreds of millilitres / instead of short-term stabilization or slower decline as competitors. The efficacy demonstrated by Vicore’s drug in the February 2022 readout drug showed a
lung function gain of +251mL at week 24 & +751 mL at week 36 – unprecedented and we believe this will soon be further reinforced.

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The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.

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