MPC Energy Solutions (MPCES) main business activity is to develop, construct, own and operate renewable energy assets. MPCES focuses  on expanding its portfolio in LATAM and Caribbean region. The company has been listed in Oslo since January 2021.

The company has cash on the balance sheet of USD81 mln while trading at 69 million. MPCES trades below its cash on the balance sheet.

The stock should benefit from: 1) Short-term triggers from project development; 2) cash flow generation already in 2022/23; 3) funding secured for its initial growth plan should add meaningful support in the share going forward. 3) increase in NAV multiple due to projects coming to operation

Yesterday MPCES announced an acquisition of operating solar plan in North Mexico.

Our family office is long MPCES from the IPO. The stock trades well below its IPO price now.

Below is a summary from Fearnley morning note today:

MPC Energy Solutions (Buy, TP NOK 65/sh)

• Acquires solar project in Mexico

MPCES announced yesterday that it has entered the Mexican renewable market through the acquisition of Los Santos Solar I. The project is located in Ahumada, Chihuahua, in the North of Mexico. The plant has been fully operational since 2017 and has installed capacity of 15.8 MWp. The project is part of the advanced backlog which was put forward by MPCES in the last quarterly presentation. The project was financed and built by multinational renewable energy project developer Buenavista Renewables (BRV), with a USD denominated PPA with the German cable manufacturer Leoni Cable and the International De la Salle Educational Network. MPCES has acquired 100% of the project and obtained financing from form the US Government’s Development Finance Corporation (DFC) and the North American Development Bank (NABD). Closing is expected to take place in 1q22. Notably, the project has potential to be extended from 15.8 MWp to c. 90 MWp and MPCES has signed a ROFR with the developer. The extension may be ready-to-build in 2023.  

We continue to highlight MPCES as an attractive investment case. The company is priced below net cash on the balance sheet (as of 2q21) with USD 81m net cash, around USD 69m market cap and thus negative enterprise value of. The stock should benefit from: 1) Short-term triggers from project development; 2) cash flow generation already in 2022/23; 3) funding secured for its initial growth plan should add meaningful support in the share going forward.

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.

Linkfire is Denmark based and Sweden listed smart link service provider to all major music streaming companies. Yesterday, Linkfire announced acquisition of smartURL, the pioneer of the smart links and the second largest player in the area. By doing so, LInkfire strengthens its market position. We are long Linkfire.

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.
• Very strong catalysts in the next six months should cause the share price to double.

Pareto summary of the acquisition

Linkfire consolidates smart link market, will help reach the 50% growth target

Linkfire acquires smartURL a smart link provider and competitor to Linkfire. The transaction is an asset buyout from Gupta Media. The transaction will increase consumer connections (traffic) as well as the monetization abilities that Linkfire adds to the combined offering. The strategic partnership with Gupta Media will improve Linkfire’s overall RPM performance and bring significant expertise in digital advertising, an underdeveloped part of the Linkfire business model. The deal is expected to close late in 2021 or early 2022 and to add an uplift of at least 15% to current revenues of Linkfire.

Transaction value of max USD 4.8m, of which 2.35M is initial payment and 2.45M potential earn-out

The transaction is a combination of cash and equity for a max value of USD 4.8M. Initial consideration of USD 2.35M, equally split in cash and Linkfire shares. The cash portion of USD 1.175M, is financed with existing funds. The number of shares will be determined via a 5d pre-signing and a 5d post-signing average price (VWAP). Based on Wednesday’s closing price, the issue would amount to 1.36m shares, and a dilution of 2.3%. A potential earn-out of up to USD 2.45M (in cash or shares) could be paid over the next 2 years if certain targets for commission revenues are met.

smartURL, a pioneer in the music smart link market, backed by digital-media powerhouse Gupta Media

smartURL was founded in Israel in 2009 and was the market leader until Linkfire took over in 2016-17; up until then the major music labels had been users of its platform. Since then, the company has added more functionality to its platform and its service now provides similar functionality to that of Linkfire at a similar, but slightly higher, price point. It currently offers three main subscription plans: a free one, one called “Pro Plan” at USD 49/month and one called “Premium Plan” at USD 249/month. Even though the company has lost market share in the past few years it still has a lot of older links that generate significant traffic, although not reaching Linkfire’s traffic levels. smartURL is owned by Gupta Media, a company specialised in digital marketing.

Linkfire will present at Pareto TechSaaS event next week (Nov 10-11). The Q3 results will be released on Nov 18th.

Detailed investment thesis:

https://seekingalpha.com/article/4439470-linkfire-music-streaming-play-market-leader-growing-above-50-percent

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.

Energy Recovery  (ERII) is the major position for our family office. The stock more than doubled since I wrote the thesis for SumZero and SeekingAlpha about a year ago. However, I believe we are still at the early innings.

Yesterday I recorded a video interview with SumZero CEO on ERII for their
video channel. SumZero is the largest institutional investor idea platform. It
was founded by Winklevoss, who co-founded Facebook with Zuckerberg. The link to the video is below.

ERII is USD 1.2 billion US-based market cap, growing at 20-25% pa, gross margin of 70%, no debt, and USD100 million in cash. ERII has revolutionized the desalination industry, where it has a 100% global market share for large projects. They have not lost a major contract for seven years. They are now introducing their unique technology in other industries. The growth is due to accelerate significantly in the coming quarters. They managed to revolutionize and monopolize one industrial segment; they are now starting to repeat this strategy in three other segments.

In the video, I tried to summarize the ERII investment thesis. We are very bullish on ERII.

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.

Vicore Pharma today announced positive results of their Covid drug Phase 2 study. I enclosed below a summary from Pareto Research published today.

We are long Vicore Pharma. The company is now recruiting for its COVID-19 phase 3 trial is now recruiting in 14 hospitals globally. Vicore is showing steady progress while continuing to be fairly hidden/unknown and
trade at a strong discount in our view, even when considering solely its potential in idiopathic pulmonary fibrosis (IPF).

From our Scandinavian Pharma portfolio we have positions in Biovica, Bioinvent, Vicore and Ascelia. We have exited this year from Xbrane with above 100% return over 6 months period. We will be reentering the Xbrane trade after the share price declines further, as the company is now facing a year process to gain FDA approval. Our current top pharma position are Biovica and Bioinvent. I wrote here several times about Biovica, I will publish Bioinvent within the next days.

Pareto take on Vicore Phase 2 annaouncement:

Positive COVID-19 phase 2 long-term data

Vicore Pharma today announced phase 2 clinical data from the COVID-19 long-term follow-up study. The study followed 33 hospitalized COVID-19 patients (from the phase 2 ATTRACT trial) requiring supplemental oxygen at the time of enrollment for 3-6 months (but have not progressed to mechanical ventilation at the time of enrollment). Patients’ lungs were assessed with CT scans with the major radiological change observed being “opaque area / hazy opacification” of the lung, dubbed ground-glass opacity. The patients treated with Vicore’s drug, C21 (VP01), showed a nearly 50% lower occurrence of such pathological abnormalities (10.3% affected) compared to placebo (19.2% affected). Considering the strong phase 2 data on clinical parameters (reduction in need for supplemental oxygenation) and other data bits such as the IPF lung transplant data of 2020, the regenerative biology activated by the first-in-class angiotensin type 2 receptor agonist C21 gained further validation today. Vicore’s lead drug continues to impress and look like it could become a potential blockbuster drug within the “drug graveyard” of fibrotic lung diseases and possibly beyond. We therefore reiterate our Buy recommendation and target price of SEK 97 per share.

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.

Ascelia Pharma is reporting on 4/11. Below is a summary of the presentation at Redye Research.

Ascelia sold off after Q2 based on slower recruitment of patients for Phase 3 study of Orviglance due to Covid restrictions. The bar is very low. Positive Q3 patients recruitment data on Thursday could drive the stock up materially.

Ascelia has two products:

Orviglance:

• A contrast agent for kidney MRI. Currently in advanced Phase 3 study.
• Target market of UDS 500-600 million of annually
• 6 studies for Phase 1 and 2 completed
• Pivotal Phase 3 study in 50 sites is due to be completed in 1H22 – including Mayo and Karolinske

Oncoral:

• oral drug for treating gastric cancer
• Better efficacy and safety
• Phase 2 study due to be completed in 2024
• Clinical collaboration on Oncolar with Taiho Oncology
• After gastric is planning

Watch the full presentation from the Redeye conference:

https://www.redeye.se/video/event-presentation/824583/ascelia-pharma-ceo-magnus-corfitzen-presenterar-pa-redeye-investor-forum-malmo-28-okt-2021?utm_source=video&utm_medium=email

Ascelia Pharma is fully funded to complete the above studies.

We are long Ascelia Pharma.

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 am bullish Norske Skog (NSKOG) for some time. During the last two months both Pareto and Sparebank listed NSKOG in their monthly TOP IDEASES for Norway. ABG is increasingly bullish too. Pls find below a front page summary of their 20 page report on NSKOG:

Norske Skog
Very large price increases for ‘22

Q3 was better – very large paper prices hikes into ‘22
Clean EBITDA of NOK 111m was 23% above Infront consensus as higher paper prices added NOK 195m q-o-q while higher RCP/energy costs deducted NOK 163m. In addition, the utilization rate was 95%. Newsprint prices rose 17-18% in Q3 and have been announced up another ~27% due to very high RCP/energy costs and tight paper markets in Europe. Our MTM points to ~NOK 2bn for Norske Skog if we include the announced price hikes. Gas prices have shot up and Norske buys 1.1 TWh of gas at the Bruck site. This is negative short-term, but the gas bill should be much lower from Q2‘22 when the Bruck energy boiler starts up. The CO2-related payments could rise NOK 300-400m into ’22/’23e on higher CO2 prices.

A pipeline of growth projects; SOTP ~NOK 65-80/share
Norske Skog has several growth projects in the pipeline that could more than double EBITDA. The key projects are paper to packaging conversion and the new waste-to-energy facility, which could add NOK 70m and NOK 200m, respectively. We arrive at a discounted value of NOK 65/sh. Approximate values would be NOK 30/sh for the paper assets, NOK 24/sh for the packaging conversion and NOK 12/sh for the waste-to-energy facility. This calculation does not include the potential from its other projects. We find an SOTP value of ~NOK 80/sh if we also include the potential values from the remaining projects (Cebina, Circa, pellets).

————-

My NSKOG Investment thesis summary:

• NSKOG 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.
• NSKOG’s renewable asset portfolio has a higher value than NSKOG current market capitalization
• Newsprint plant closures are pushing prices higher that should multiply NSKOG profitability. It is already happening and should accelerate further into 22.
• 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.

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.

Our family office was invited to participate on the call with QFUEL management yesterday. The family office that invited us owns above 1% of QFUEL. Our family office has a material position in QFUEL too. I summarize below the main takeaways :

No Skive delay

• The plant reconstruction is proceeding as planned.
• All equipment is either in Skive or is on the way with confirmed delivery in the first week of November.
• The management does not anticipate a delay in the plant modifications due to some equipment missing.
• The reconstruction should start in early November.
• The first modified line should be back in operations in the first half of December
• The other lines will be reconstructed right after that.

Proof of concept around year-end

• QFUEL has run numerous tests during the last months that make them confident that the proof of concept should be reachable around the year-end.
• This was said by Terje at the Pareto conference few weeks ago, and it was reconfirmed again today.

INdustrial-scale production in Skive expected in 2Q22

• The management expects it will take one or two quarters for the production to reach an industrial scale with meaningful revenues.

VItol plant permission by mid-2022

• At the Pareto conference, Terje stated that QFUEL selected a site for the Vitol plant in Amsterdam, and is submitting an application for building permits.
• The management confirmed today that permits could be obtained by mid-2022—the plant with then take 24 months to build.
• Vitol second plant is to be built in Antwerp. QFUEL is in the process of obtaining permissions for the Antwerp plant, which should be received within a year.
• There should be good news flow related to the plants progress in the following quarters.

Kristiansund production this year!

• The mechanical line 20k tonnes should start production by the end of this year. This should add to QFUEL revenues
• Chemical recycling plant construction should start next year and should take 24 months to complete
• The partner for the plant is BASF

ESbjerg partners

• The company has good interest from both industrial and financial investors to participate in the Esbjerg project. No partner was selected yet.
• They have all the permits for plant construction.
• Once the partner is selected, it should take about 24 months to complete.

QFUEL is building a relationship with US investors

• This year QFUEL participated in an investor conference organized by Bank Of America. The relationship is expected to continue with a goal to broaden the QFUEL investor universe. QFUEL hopes to participate on more US conferences

OUR TAKE

Very positive to get a reconfirmation of NO DELAY in Skive reconstruction. It was also positive to see their confidence in reaching the proof of concept around the New Year.

Share price impact: If you look at past price performance, when the market expected proof of concept, the share price jumped above 80 NOK. That is more than triple from today share price. The share price could easily beat this when proof of concept is achieved. That is 200% upside. If the proof of concept is again delayed, you could seek QFUEL declining to low 20s NOK. That is 20% downside. 200% upside vs 20% downside seems like a good risk reward.

The company is very active in preparing new plant projects. Once the proof of concept is achieved, there should be a lot of traction – there will be four large plants under construction at the same time. There should be a lot of positive newsflow.

Interesting article on QFUEL in Der Aktionaer:

https://www.deraktionaer.de/artikel/aktien/goldman-stuft-diesen-recycler-auf-buy-30-prozent-aufwaertspotenzial-20239358.html?fbclid=IwAR3C7HMMKs3-yduzpSzLqO0uKh4NiAXRL8YsfMoKWsMVVnFILaa6FA1nIIE

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.

We summarize our largest conviction ideas, we currently have in play in Sweden and Norway. We present today our larger positions. We will bring our smaller positions in the next few days.

Biovica

Biovica is Sweden based company that developed breast cancer tests, that can early detect the severity of the cancer and indicate, whether the selected medication is having effect.

Early this year, one of our top convictions ideas was Xbrane. As we predicted the share price doubled over a period of few weeks. Biovica is similar play like Xbrane. It is awayting FDA approval, which Pareto analyst expects with 95% certainty. The reason is Biovica over 30 studies from best US and European hospitals. You do not often see such study strength. The FDA approval should happen Oct/Nov.

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 Biovica investment thesis:

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

Linkfire

Linkfire is providing smart links for music streaming industry. They have 70% market share and growing strongly in its innovative field. 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.
• 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

Pyrum

Pyrum is the global leader in chemical recycling of tires, owned by BASF and Continental and backed by Michelin and other majors.

We published article on SeekingAlpha on Pyrum. SeekingAlpha selected our article in PRO Editor Selection of Best Ideas on SeekingAlpha. This indicates SeekingAlpha editors rank the idea highly.

Idea Summary:

• Annually, around 31 million tonnes of used tires need to be recycled. Currently, 56% is land-filled. This practice is banned in most developed markets now.
• Pyrum is the global leader in the chemical recycling of tires, addressing the global tire waste problem with a patented pyrolysis solution, recycling rubber into high-value products.
• Its first plant has been in continues operation since May 2020. The capacity is sold one year forward.
• The company has global technological leadership years ahead of the competition.
• Its strong partners Continental, Michelin, and BASF support the investment case.

Original investment idea published on SeekingAlpha

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

Quantafuel

Quantafuel is the global leader in plastic recycling. BASF is the largest investor. The company lost 70% of its market capitalization in the last 6 months due to the delay in delivery of start of continues production. We believe the company has turned the corner. It has appointed a new CEO last week, and is due to install new equipment in November which should bring the company into continues production. If that happens the share price potential is 200% within a short term period. It should regain the share price levels where it was trading when the management announced production delay. This is expected in Nov/Dec. Risk reward is very appealing. We estimate 20% downside if there is further delay, and 200% upside if the production goals are achieved. Full investment thesis is below:

https://seekingalpha.com/article/4378135-quantafuel-global-leader-in-chemical-recycling-of-plastic-backed-basf-and-vitol-potential-to

Africa Energy

AEC is our top oil company position. I believe it has a potential to triple over the next 12 months.

There is one big difference between AEC and other oil plays. There are many oil companies that have great portfolios and are buying cheaply oil assets from the majors. Where AEC differs is – it has one of the top gas condensate assets that it is intends to sell. Pareto believes the sale should happen within 12 months. The sales price is most likely a multiple of its current market capitalization. If there is a low risk high return play, it is AEC.

Latest update

Africa Energy – excellent update from Pareto conference – valuation impact assessment

Full investment thesis:

https://seekingalpha.com/article/4444974-africa-energy-backed-by-total-asset-sale-behind-the-corner-to-triple-your-capital

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.

We published article on SeekingAlpha on Pyrum. SeekingAlpha selected our article in PRO Editor Selection of Best Ideas on SeekingAlpha. This indicates SeekingAlpha editors rank the idea highly.

Idea Summary:

Pyrum Innovations: Co-Invest With BASF, And Continental In The Global Tire Recycling Leader

• Annually, around 31 million tonnes of used tires need to be recycled. Currently, 56% is land-filled. This practice is banned in most developed markets now.
• Pyrum is the global leader in the chemical recycling of tires, addressing the global tire waste problem with a patented pyrolysis solution, recycling rubber into high-value products.
• Its first plant has been in continues operation since May 2020. The capacity is sold one year forward.
• The company has global technological leadership years ahead of the competition.
• Its strong partners Continental, Michelin, and BASF support the investment case.

Original investment idea published on SeekingAlpha

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

PRO Editor Selection of Best Ideas publication on SeekingAlpha.

https://seekingalpha.com/article/4459396-sa-pro-editors-pyrum-innovations-100-percent-plus-upside

Comparison of Pyrum vs Quantafuel

Pyrum vs Quantafuel – comparison of the two leaders in chemical recycling

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.

Every month Pareto Securities and Sparebank publish their top pick ideas for the month. Norske Skog is on both top idea lists – it is the only stock both houses rank as top idea. For both it is the second month in a row. I enclose below the justification for they presented.

SpareBank note on Norske Skog:

Newsprint and containerboard prices up 15-20% and marginal change up for input costs

Power compensation alone could increase EBITDA with NOK250m, but political uncertainty (not included in estimates)

The closures of capacity have rebalanced supply demand and according
to our knowledge, newsprint prices in Europe has had an material
increase in July. Q2 was a disappointment due to higher costs for
recovered paper (RCP), but RCP prices have been flat the last month.
Cost increases are front-end loaded.

The effect of the closures and hence increased utilisation have
according to our knowledge led to a material increase in prices for
newsprint in Europe. Our take is that the share prices for peers to
NSKOG have increased the last month due to this price increase with
NSKOG lagging peers. The enterprise value of NSKOG is small compared
to peers and NSKOG has a large investment programme starting in Q3
2021, but still we argue the disconnect to peers is unwarranted.

Overall, we expect prices for NSKOG will increase 15% compared to Q2
2021 for Q4 2021 and around 10% in Q3 2021 as some contracts will
have price increases later in Q3 2021. From Q4 2021, with 15% price
increase, flat RCP prices and higher gas prices, we expect NSKOG to
deliver an annualised EBITDA close to NOK1bn. If valued in line with
peers, we argue that a fair share price is NOK closer to NOK100. The
conversion to containerboard is in our mind a step towards being
valued in line as a going-concern. As the majority of the current
portfolio for NSKOG is exposed to a declining market, we value NSKOG
based on a “5% decline in demand” scenario and view NOK50 as a fair
target price.

We recommend buying NSKOG ahead of the Q3 numbers as we expect
this quarter will show the effect of increased utilisation/prices and the
path to a NOK1bn EBITDA scenario.

Pareto Securities note on Norske Skog in top pics

NSKOG – BUY, TP NOK 60
We keep NSKOG in our monthly portfolio. 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, currently trading at 3.4x
EV/EBITDA’22E (PAS est. adj. CIRCA stake).

BUY / TP NOK 60

My 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.

Norske Skog will be reporting Q3 next week. Should be major catalyst for the stock

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

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.