– The Humble price has almost doubled since the summer, but it is not too late to join the next 100 percent, claims the manager of DNB Nordic Small Cap, which has returned 85 percent since the start in late 2019 and 22 percent last year.
– Still few have become familiar with the company, even though interest is increasing.
Humble produces, sells and distributes organic and sustainable consumer goods, both via its own brands and for other players.
– The company is strong in, among other things, sugar-free sweets, protein bars and protein powder, says Ludvigsen.
– The balance sheet is nothing to whine about anymore, and as long as people think the company only sells bamboo toothbrushes, I am comfortable that the share has more upside.
Humble is priced at just 6-7 times DNB’s estimated operating profit in 2025.
Still few have become familiar with the company, even though interest is increasing
Hans-Marius Ludvigsen, DNB Asset Management
MANAGER SMALL CAP FUND: Hans-Marius Lee Ludvigsen at DNB Asset Management. Photo: Stig B. Fiksdal
50 percent too cheap
Number two is Matas, a pan-Nordic retailer of cosmetics and beauty products.
– This was originally a Danish store chain that was neither bird nor fish, but now the strategy has been refined, the expression renewed and the online investment strengthened, says Ludvigsen.
– The company recently bought the competitor Kicks, where there should be both low- and high-hanging fruit to pick on the synergy side.
Ludvigsen believes that the earnings estimates for the next few years are far too low, which contributes to the Matas share being “at least 50 per cent too cheap”.
Track better margins
Dustin Group is a third favourite.
– The company made a large debt-financed acquisition in 2021, so when the market quickly worsened in 2023, you were left with a drop in earnings and an aspen leaf of a balance sheet, says the manager.
– The market is still bad, but the margin is under control, and if demand normalizes this year, the share should trade significantly higher.
In recent years, Finnish Talenom has experienced disappointing margins and price falls, due to aggressive expansion through acquisitions.
– However, the accounting company has come a long way in its digitization journey, and the margin should now have bottomed out, believes Ludvigsen.
– Then the stock will go up.
An old favourite
The gaming stock Stillfront is an old favourite, although since the pandemic it has offered little to enjoy.
Ludvigsen points out that the mobile games market has stabilised, and expects organic growth over the course of a couple of quarters.
– The balance sheet is a bit shabby, but under control, and from 2025 the cash flow will be good, when most of the additional purchase sums for previous acquisitions have been paid, he adds.
– The share did not rise, when interest rates fell late last year, and should have a latent rally in it, as soon as they deliver a half-decent report.
Humble Group
Matas
Dustin Group
Talenom
Stillfront
All the shares are owned by the fund DNB Nordic Small Cap.
2024-01-21 07:28:23
#Tracks #price #doubling #Humble #Group
