Author Archives: Fit Investment Ideas

I am big believer in chemical recycling. There are two leading companies – Quantafuel (QFUEL) focused on chemical recycling of plastic. and Pyrum Innovations (PYRUM) focused on chemical recycling of tires.

Both companies have strong strategic vision and I belive that both are best positioned to become global leaders in their field.

What they have in common

• Strong partners – both have BASF as the main shareholders. Pyrum has Continental as a shareholder and have backing from Michelin and others
• Strong management – Pascal Klein is equally strong as Dr Lach
• Technology superiority – both companies are the global market leaders in their technology. Pyrum si perhaps even a step ahead of QFUEL.
• Strong vision – both companies have credible plans how to transform their technological superiority to global production leadership
• High upside potential – if Pyrum and QFUEL would become global leaders by sales, the share price potential is meaningful – both companies could be easily 10 times more valuable in 3 to 5 years time frame.
• There are companies in the US that trade at USD1.7 bln market capitalization while being years behind QFUEL (PureCycle technologies, ticker PCT). This is an indication of upside potential.

There are few differences:

• Pyrum is already operation continuous production since March 2020. There was no single unplanned production interruption. It means you do not have the technology risk – two years of continuous production is good proof of the technology
• Pyrum is cheap vs QFUEL – Pyrum is valued at 50% of Quantafuel. This valuation difference is unjustified, given Pyrum being one step ahead of QFUEL as they are already in continuous operation since March 2020.

I am long Pyrum since the IPO and I doubled my stake in the last two weeks. I am long QFUEL.

Detailed investment thesis was published yesterday on SeekingAlpha:

https://seekingalpha.com/article/4459088-pyrum-innovations-co-invest-with-basf-and-continental-in-the-global-tire-recycling-leader

Disclosure: 

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.

I reached out yesterday to Biovica on the FDA approval.

Question

I read your announcement and all the research and info on the FDA delay. May I please ask how this works? Will FDA give you a signal that you are back In the review process?

Answer

Some background about the FDA process. We submitted in September 2020 and passed the two first milestones in the FDA process, see this link: https://www.fda.gov/medical-devices/premarket-notification-510k/510k-submission-process#timeline

So, since October 2020, we’ve been in Substantive Review phase. However, at the same time, we got the feedback about the 90-day delay, since the FDA re-allocated all their resources to Covid-applications and put all others, including ours, on pause.

After ~80 days into the pause, in mid January 2021, we got the information that the pause would be extended with 90 days but the FDA opened up for an opportunity to come in with feedback to argue for why our case should be one of the few that they prioritized re-started earlier.

So, we did that and submitted a strong case for DiviTum and our case. That resulted in positive feedback from FDA as they on the 29^th January 2021 officially reopened the review of our application.

However, nothing happened until end of May 2021 when we got a lot of questions from the FDA. We then did an SIR submission to be able to meet with all FDA experts to discuss the questions raised by the FDA. During this process most of the questions were resolved and only a few questions remained to be discussed and answered. The FDA then gave us feedback that the remaining questions would be resolved interactively, which we thought was very positive.

However, during August and September the FDA couldn’t provide feedback quickly, it often took them several weeks, due to their high workload, which is a result of the backlog caused by the pandemic situation.

In the last weeks, we have provided feedback requested by the FDA, and we’ve been able to sort out several of the open questions which we now are waiting for feedback on from FDA.

Given the current backlog due to the pandemic situation, it is difficult to give a forecast, as we’ve given all the input we’ve been asked for and are waiting for the FDA response. The next step after the FDA feedback is for us to submit the updated application and hopefully the next step should go smooth as we’ve sorted out all open issues with the FDA.

My summary from the above:

Biovica is waiting for a feedback from the FDA on last open issues. That could come any day now. After that they will submit updated application, which should result in FDA approval. Pareto and ABG stated that they believe the FDA approval may come as early as October. For the value of the stock, it is not relevant, if that happens two weeks or two months later. The relevant issue are:

1. The likelihood of the FDA approval is very high – Pareto gives this 95% probability.
2. After the FDA approval the share price should re-rate strongly
3. There will be further material catalysts right after approval – mainly the imminent start of the US sales and agreement on reimbursement with US insurers (expected within two months of the approval)
4. In 2022 Biovica will file application for other cancer tests
5. I spoke to the analysts, they believe that next year Biovica shold become a takeover target. Redeye has a bullish scenario over 300 SEK. It is not unrealistic, that we could see this share price value next year

I believe Biovica offers the best risk/reward in Scandinavian Healthcare. The share price should at least double this year and potentially multiply further next year. If you doubled your money playing Xbrane with me, this ride will be even better.

Full investment thesis:

https://seekingalpha.com/article/4437698-biovica-international-should-double-on-novel-breast-cancer-test-launch-in-q3

Yesterday Pryme BV, a Dutch based plastic recycling company announced its partnership with Shell. The share price jumped by 100% in two days. It now trades at 44 NOK. Pareto has price target of 150 NOK. Plenty upside potential.

Pryme is currently building its first plant announced its partnership with Shell. The importance of the agreement could be illustrated by Shell press release stating:

SHELL AND PRYME SIGN STRATEGIC PLASTIC WASTE TO CHEMICALS COOPERATION AGREEMENT

You can read the press release below:

https://www.shell.com/business-customers/chemicals/media-releases/2021-media-releases/shell-and-pryme-sign-cooperation-agreement.html

Pryme jumped by 74% yesterday and is up further 13% today. It is still well below its IPO price. I am long Pryme and I expect further re-rating as the newsflow on construction progress would be comming in Q4 and Q1.

Below is Pareto Securities comment on the partnership:

The partnership with Shell is the perfect catalyst to revive Pryme’s investment case as it provides comfort on the promise of the technology, scale of upside potential and derisk offtake of produced products. With a market cap of EUR 60m post today’s 74% share price increase and a value potential of >EUR 100m from the initial plant alone, we continue to find the upside potential appealing. Upon success at the first plant next year, we think the market also will attach value to future growth that likely can be turbocharged by Shell. While the share price has traded down on weak peer performance and lack of news flow, we keep BUY/TP NOK 150 unchanged as Pryme continues to deliver on its promises

Fusion Fuel

Last week I wrote here about Fusion Fuel, that has a unique technology for hydrogen production through its sun powered technology. The company now trades at 57% of its cash balance.

Madrid project of big strategic importance
Fusion Fuel (Ticker HTOO) announced a new project with Exolum (leading European fuel logistics and storage provider) yesterday to develop a turnkey solar-to-hydrogen plant to supply green hydrogen to Madrid. Fusion Fuel will install 21 of its HEVO-SOLAR units along with a co-located refueling station. In addition to producing hydrogen from solar radiation during the daytime, the facility is expected to double its output by leveraging other sources of renewable energy to produce emissions-free hydrogen at night. We spoke with management yesterday, they are ‘extremely excited’ about the project since Exolum has announced a consortium with Enagas and Naturgy to make a H2 refueling station network in Spain and they have not yet chosen a H2 technology provider. In other words, this is a strategic project for HTOO as they want to grab the H2 technology provider position and the initial project may be viewed as a demonstrator project. Exolum is massive and manages Europe’s largest network of refined products and are ranked second in Europe in terms of storage capacity and 7^th in the world. Management says the relationship overshadows nearly all other announcement HTOO has made.

I expected a strong move on the announcement. Surprisingly, the share price did not move.

I am long Fusion Fuel, because it trades at 50% of its cash, it has a unique technology that is certified to work and it has real contracts. Attractive risk reward opportunity.

Fearnley published research on HAV Group this morning.

I am long HAV since its IPO. I think this is very good summary of the investment case. Considering buying more after reading this.

Fearnley front page summary:

Maritime Sectors are Screaming for a Greener Future

HAV stands out as one of few companies within the energy transition sphere with solid cash flow generation (FSest adj. FCF yield for 2021/’22/’23 at 13/9/11%, respectively). ‘21 is looking to be an extraordinary year, mainly due to delivery of the Kystruten contracts and we expect normalized design revenues for ‘22/’23 (FSest NOK 100-150m annually excl. trading). That said, we estimate high growth for both NES and NGT and see triggers from i) contract awards, ii) potential international expansion for NES, iii) ballast water convention for 2024 getting closer, and iv) additional upside from hydrogen, leaving strong support in the share. Longer-term, we continue to see HAV as one of the best ways to play the greener future within the maritime industry.  We maintain our NOK 25/sh TP and Buy recommendation (NOK 25/sh 25.03.2021).  2021 has been extraordinary and 2022/’23 will come down2021 is looking to become an extraordinary year (HAV delivered annualized FCF yield of c. 28% last quarter). The company has guided revenue for 2021 of NOK 850-950m with EBIT margins in-line with 2020 levels (c. 7%). We expect overall revenues to come down in 2022/’23 due to more normalized design revenues between NOK 100-150m excl. trading. However, NES and NGT is expected to grow significantly. We lower our Design revenues by 40-35% for ’22-’23 and increase NES sales by 40-33% whilst NGT sales are more than doubled. This leaves FSest total revenues of c. NOK 744/795m in ‘22/’23, which is up 0/3% from our previous estimate.  The long-term story remains intact Longer-term, we believe HAV is a solid investment case on the ever-tightening regulations within the maritime industry. As a case in point, shipping accounts for c. 2.5-3-0% of global emissions and seaborne trade is set to nearly triple by 2050. Further, organizations have implemented ambitious targets and restrictions with more expected to come. One example is the ballast water convention requirement for sailing vessels by 2024. Another is zero carbon tenders for the offshore wind installation space, with both adding demand prospects for HAV.  Valuation – Buy, TP NOK 25/sh We derive a cash flow-based value of NOK 25/sh using a DCF approach (11% WACC), with EBIT margins of c. 8.0-12.5% for HAV Design (NOK 10/sh), 5.0-10.0% for NES (NOK 9/sh), 5.0-10.0% for NGT (NOK 4/sh) and 5% margins for Hydrogen (NOK 1/sh). Adjusting for NIBD and NWC leaves us with a NOK 25/sh target price.

Pareto released last week report Nordic Healthcare Triggers for October.

I select the most interesting ideas from the report and copy the main statements plus my comments.

Biovica

Biovica is my top pick in the Nordic Healthcare. Who follow this blog saw how we doubled money on Xbrane. Biovica is very similar case and it has the same potential to double during the next quarter as Xbrane did.

The investment thesis is similar to Xbrane:

• Biovica has 12 studies, including the most prominent US HOspitals ( Mayo, Cleveland ), that show their cancer detection product works
• FDA is due to approve the product in Q4.
• The company announced that it would start selling the product in Q4, shortly after the approval
• Pharma companies that have a major milestone in a near future achieve significantly share price appreciation. Xbrane doubled in two months on positive Phase 3 data study expectation. Biovica is the same situation
• The 12 study from best hospitals reduces risks for FDA approval. Pareto believes that there is 95% likelihood of FDA approvment.
• Biovica is a perfect candidate to double in the next 2-3 months.

Detailed investment thesis:

https://seekingalpha.com/article/4437698-biovica-international-should-double-on-novel-breast-cancer-test-launch-in-q3

ABG and Redeye research are available at Biovica website:

Introduce.se – Biovica – Take-aways from Capital Markets Day

Biovica: Q4 confirms that the FDA approval is on track (redeye.se)

Biovica: DiviTum to Stir Some Blood (redeye.se)

Pareto Nordic Healthcare triggers comment:

Biovica – PAS rating: Buy, TP SEK 103

FDA’s handling delayed, call with CEO
Biovica today announced that there has been a delay in response from the FDA. In a call with the CEO this morning, it was confirmed that nothing new came up but that it is just an FDA-related delay. After
the last meeting with the FDA, the company received the meeting minutes and prepared an answer based on all requests with minor questions surrounding the intended use to be discussed interactively (a
point where a company usually aims for wider claims and the regulators wanting everything backed by data / keep the intended use narrow). These are detailed questions/negotiations surrounding the
broadness of the intended use and there have been no questions anymore regarding predicate device, this has been solved early on. The FDA however has not come back yet on these intended use details, so
the company is still waiting for them to ensure the best possible outcome of the submission/widest possible intended use for DiviTum. Based on these insights, we see no increased risk of a rejection of Biovica’s submission. As previously communicated, we expect approval before end of October, with
additional delays depending on COVID-19 related regulatory workload for the FDA. We reiterate our
rating on BIOVIC with a target price of SEK 103.

Vicore Pharma – PAS rating: Buy, TP SEK 97

VIcore is a new position for me. I will write about the thesis in next days. I recommend everybody to start a research on this. Below is Pareto comment:

• On 17 September, the company announced that the first Covid-19 patient had been dosed in the phase lll study ATTRACT-3. The pivotal phase lll trial is currently approved in the US, Ukraine, South Africa, Brazil, Czechia, the Philippines and India. The study will include 600 adult patients hospitalised with Covid-19 requiring oxygen support but not mechanical ventilation. The primary objective is to evaluate the effect of C21 on recovery from Covid-19. Patients will be randomised to receive 100 mg C21 or placebo twice daily on top of standard of care for 14 days and be followed for 60 days. Trial start-up activities are ongoing at more than 40 clinical sites globally. Topline results are expected during the first half of 2022. Read the PR here. Read our comment here.
• On 22 September, the company announced that it had obtained a SARS coronavirus patent for C21 in the USA. This new patent gives Vicore patent protection in the US market until December 2040. Read the PR here and our comment here.

Bioinvent

BioInvent – PAS rating: Buy, TP SEK 115

Bioinvent is a new position for me. I will write about the thesis in next days. I recommend everybody to start a research on this. Below is Pareto comment:

Awaiting 4 catalysts with a sp dragged down by peers

We see a unique and short-lived discount to BioInvent’s share price. The share price has been impacted by the expectations for BI-1206+Rituximab dose expansion data in Non-hodgkins lymphoma (NHL) in late summer (delayed to December) and by issues of three close Swedish oncology peers Isofol (down -60% YTD), Cantargia (down -60% YTD) and Oncopeptides (down -80% YTD). We see large differences between these companies and BioInvent. Without going into too many details, both Oncopeptides and Isofol are based on an old chemotherapy and each have only one drug candidate in clinics, which is also true for
Cantargia, which develops one novel antibody that is facing issues with side effects. BioInvent in contrast, has 3 novel antibodies in 4 clinical programs and is expected to have 5 antibodies in at least 6
programs by end of 2022. Further, BioInvent established strong clinical proof of concept (PoC) for its lead drug BI-1206 in NHL in January 2021 – showing good safety and efficacy. Based on insights from
Tislelizumab, an anti-PD-1 checkpoint inhibitor with Fcγ interaction-minimizing properties, we are confident that BI-1206+Pembrolizumab (Keytruda) will have an effect in the much bigger area of solid
tumours. BioInvent is expected to deliver 4 catalysts over the coming 7 months. These include clinical data from BI-1206 in NHL and in solid tumours (the biggest near-term catalyst due to larger market size)
in December. Further, data from BI-1808 (first TNFR-2 antibody in clinics) and BT-001 in solid tumours are expected in Q1 2022. The current low valuation renders it enough that BioInvent succeeds with only one of the four programs to increase the share price. While the market seems to be unable to value the company, global biotech specialist funds head up the shareholder list and funded the company with SEK 1.5 bn in the bank as of end of Q2 (mcap SEK 2.3bn). For more information, please consult our latest update. We believe that the company will leave these lows latest in December and thereafter not re-visit them and thus re-iterate our Buy rating with a target price of SEK 115.

Ascelia Pharma

Ascelia is a new position for me. I will write about the thesis in next days. I recommend everybody to start a research on this. Below is Pareto comment:

• On 21 September, the company announced that it had signed a clinical collaboration agreement with Taiho Oncology Inc., a subsidiary of Taiho Pharmaceutical Co. Ltd. The collaboration concerns an upcoming global phase ll clinical study in gastric cancer. In this study, Ascelia´s Oncoral will be evaluated in combination with Taiho Oncology´s Lonsurf®, i.e., this will be an all-oral combination study. As part of the agreement, Taiho will supply Lonsurf® as well as scientific expertise for the study. Depending on the results, the collaboration may be extended for further development of the two agents. The phase ll study is planned to start in H2 2021 and will include approximately 100 patients with metastatic gastric cancer. The initial portion of the study will be conducted at hospitals and clinics in Europe. Read the PR here.

Summary of the Pareto Research is below:

Structural and cyclical earnings uptick ahead

The European publication paper market has responded well to the
strengthening of the economy and better than originally anticipated.
Limited supply of recycled paper and capacity closures have tightened
markets further, seeing additional price hikes into 2022. NSKOG’s legacy assets are thus set for a structural and cyclical earnings uptick, and we see potential for 6-7x quarters with consecutive earnings growth. Also, recycled containerboard is leaving ample upside where current market prices now imply ~2-3x higher EBITDA potential than initially estimated. Along with fibre/renewable energy projects running according to plan, we find the upside potential encouraging. We reiterate Buy and lift TP to NOK 60 (50).

NSKOG due to report Q3’21 results on 22 October at 7:00 CET
We expect Q3 EBITDA adj. of NOK 155m, up from NOK 17m in Q2. This driven by increased contract prices (raised 15-20% across all grades) as well as improved utilization. Though, partly offset by recent raw material cost hike.

EBITDA’22-23E up on improved market outlook
While we lower our EBITDA’21E due to soaring energy prices, we lift 2022-23E by 8-10% amid improving market outlook. Newsprint is short of supply, partly due to limited availability of recycled papers but also due better than expected demand. Along with capacity closures, the market has tightened further, and hence additional price uplifts are expected for 2022. And current energy and CO2 prices indicate an EBITDA effect of EUR ~30m from the WtE boiler, commencing in Q2’22 (vs. initial est. of EUR ~19m). We also raise price assumptions for recycled containerboard, as current market prices imply ~2-3x higher EBITDA potential than initially expected (first prod. in Q4’22).

Buy reiterated, TP up to NOK 60 (50)
We find a significant revaluation potential, as the market moves out of the trough and profitability for NSKOG’s legacy business improves. Valuation is undemanding, trading at 3.4x EV/EBITDA’22E (PAS est. adj. for CIRCA). With latest market development, we increase our SOTP valuation to NOK 76/sh.

Brokers are very bullish on NSKOG:

1. Two weeks ago NSKOG was put Top Idea list for September by Pareto
2. Sparebank put NSKOG on its top idea list last week. The analyst believes the Norske Skog share price should be three times higher. 
3. Last week , Carnegie joined the NSKOG bulls with doubling its price target.

See my posts from last two weeks on the above events with details from each analyst report.

NSKOG Investment thesis summary:

• it is very cheap vs its peers –  Sparebank research stated : “if valued in line with peers, we argue that a fair price is closer to NOK 100” that is 250% above its current share price.
• its renewable asset portfolio has a higher value than NSKOG current market capitalization
• Newsprint plant closures are pushing prices higher that should multiply NSKOG profitability
• Renewable assets come into production next year (mainly renewable packaging), that should significantly improve profitability further
• Doubling income from selling CO2 permits from 2022 to EURO 60 mln per year should improve profitability materially.

If interested, last week posts on this blog for summaries of Pareto and Sparebank research on Norske Skog

DENMARK’S LINKFIRE: A UNIQUE PLAY ON MUSIC STREAMING THROUGH MARKET LEADER GROWING AT CAGR 50%+

I am long LInkfire and I increased out position by 25% this week.

Five bullet point summary on Linkfire opportunity:

• There are many streaming companies. But there is just one dominating service company that serves most of them with 70% market share. Its name is Linkfire.
• Linkfire connects consumers on social platforms who wanted to download a song to music streaming companies that provide the content. Linkfire collects revenues from both.
• Linkfire revenues have grown at 40%-60% CAGR with a stable 76% gross margin. The growth is accelerating further in 2021.
• Linkfire was a victim of a difficult IPO timing. If it was placed in January or February, its share price would’ve doubled on debut.
• Very strong catalysts in the next six months should cause the share price to double.

Full investment thesis is in the article below:

Linkfire: A Unique Play On Music Streaming Through Market Leader Growing At 50%+ CAGR | Seeking Alpha

Pareto Securities bullish on Linkfire

Link to Pareto research summary is below:

The most interesting IPO this year from Sweden – Pareto intiated coverage on Linkfire

Minutes of my call with the Linkfire management

I spoke to the management in late August. The minutes of the call are below:

M&A transaction could happen very soon

During the IPO the management mentioned that they are in negotiations with one of their major competitor. On the call today they mentioned that the transaction is progressing and could be concluded “this year most certainly”. In the below article is speculated that they are about to acquire SmartURL. They should be able to buy it cheaply, because the SmartURL underinvested into its technology and are struggling to compete. Linkfire would be able to materially increase its reach through the acquisition. This transaction is the next major catalyst, that should increase the share price significantly.

“More M&A opportunities than expected“

Linkfire management mentioned, that they see more M&A opportunities than they expected during the IPO. These include both:

• industry consolidation opportunities
• new areas
• revenue enhancing opportunities

New product pipeline

At the moment, Linkfire focuses on Music. They are already started to provide smart links for webcast. The major new area are smart links for Movies. The management mentioned that they already have all the technology build up and they are now signing contracts with studios and preparing the go to market strategy. This will be another major catalysts, that could easily double the share price.

Strong growth expected in H2

The company share price sold off today, because the company did grow 52%, while in the Q1 the growth was 56%. People view that as a sign of slowing growth. I discussed this with the management. The difference is not material.

Last year the company was growing at 43%. In H1 the growth has accelerated to 52%. The company estimates the growth will continue further in H2. They stressed that the best is the Q4, due to the holiday season, when people have more time to listen…

New contract with Apple – more important than reported

On 5 August Linkfire reported a new contract with Apple music. The market viewed it as a contract extension. That does not seem a right interpretation. The press release was very dry, probably due to some legal issues. The contract includes additional services that Linkfire will provide to Apple, they will provide to Apple additional data points and additional services. As a result Linkfire’s revenues from Apple should increase. This is not appreciated by the market.

New Publisher Toolkit – new service announced only on the Q2 call

This new feature was not captured by the market. Based on this smaller music publishers would get a faster access to the service. This should accelerate new client acquisition into revenues.

Higher focus on shareholder communication

The company was listed only one quarter ago. The management appreciates the importance of shareholder communications and is in process of hiring an Investment Relation representative. They said: “We have a lot of stories to tell” and they are working on bringing those to the market.

I copy below a part of the note by my favorite broker at Fearnleys:

Fusion Fuel (HTOO US) – Trading at 57% of net cash
The HTOO stock has fallen back recently despite its first solar-to-hydrogen plant Evora now being onstream and producing hydrogen. Evora 2 is now in full swing. Speaking with management/founders earlier this week, they expect to have signed orders before year end for technology sales in addition to their own in-house projects. HTOO continues to built out their team in order to capture the many growth opportunities they have. Evora, which will be the most expensive plant, has a production cost of hydrogen above €3.5 per kilo and a selling price around $4/kg (without account for the grant the company will get which partly covers the costs incurred). For Sines Phase I, cost of production will be around €2.5/kg and a sales price around €3/kg which includes some of the subsidies (however, if this delays into the start of 2023 the cost will be closer to €2/kg). Subtracting net cash, HTOO’s market cap is a mere $54m.

I bought the stock- through the warrants ticker WHTOO US

There is a US company PureCycle Technologies (ticker PCT) that aims to recycle plastic. They are at least two years behind Quantafuel, they are building their plant. Despite that PCT trades at mkt cap of USD1.5 billion. Quantafuel trades at USD 0.4 bln. That is an indication what US investor interest could mean for Quantafuel stock.

Quantafuel just announced that they are presenting today in Bank of America investor call. I think this could be a more significant information than people think.

I have been an investment banker for 17 years. In my experience Bank of America would not organize a call for QFUEL, unless there is a relationship building and promise of investment banking business from Quantafuel. Relationship building could mean:

• QFUEL undertaking to BoA to give them a mandate for the next round of capital funding. There will be large funding needed when QFUEL starts building big plants. As a part of the funding BoA would introduce QFUEL to US investors. That would be very significant as it would multipy QFUEL investor base.
• BoA may start research coverage of QFUEL prior to the funding round. This would be a major event for the company, as it would globalize the QFUEL stock – it wold introduce the opportunity to US investors.

The above would be very major event for Quantafuel. I believe its impact on the share price could be as significant as reaching Proof of Concept.

Quantafuel announcement from today:

Quantafuel’s Chief Commercial Officer Dr. Christian Lach is presenting at an investor group call hosted by Bank of America Securities at 16:00 CET today. Please see the full presentation attached.

To see the announcement follow this link: https://newsweb.oslobors.no/message/543064

SpareBank: Norske Skog should triple if it would trade with peers. Brokers are pointing out to the opportunity:

1. Two weeks ago NSKOG was put Top Idea list for September by Pareto
2. Sparebank put NSKOG on its top idea list last week. The analyst believes the Norske Skog share price should be three times higher. 
3. Last week , Carnegie joined the NSKOG bulls with doubling its price target.

See my posts from last two weeks on the above events with details from each analyst report.

NSKOG Investment thesis summary:

• it is very cheap vs its peers –  Sparebank research stated : “if valued in line with peers, we argue that a fair price is closer to NOK 100” that is 250% above its current share price.
• its renewable asset portfolio has a higher value than NSKOG current market capitalization
• Newsprint plant closures are pushing prices higher that should multiply NSKOG profitability
• Renewable assets come into production next year (mainly renewable packaging), that should significantly improve profitability further
• Doubling income from selling CO2 permits from 2022 to EURO 60 mln per year should improve profitability materially.

NSKOG will be presenting on Monday its restructuring – dial in details below:

Norske Skog is converting significant parts of its production capacity to
establish one of Europe’s largest producers of recycled packaging, a growing market driven by increased e-commerce. On Monday 27 September at 10:00 am CEST, CEO Sven Ombudstvedt and Senior Vice President Strategic Projects Tore Hansesætre will participate in a presentation at the Xtrainvestor community to give an update on the project and answer questions.

Link to the event:
https://inqrate.com/xtravideos/norske-skog-nskog-presentasjon-med-qa-september-2
021/

If interested, last week posts on this blog for summaries of Pareto and Sparebank research on Norske Skog