Portfolio performance – first half 2016


Well, the portfolio performance the past six months have been depressing and the overall performance is rather poor. On the other hand, it seems that at least for a few of the companies early summer has been a turning point.

In overall, the average share price in the portfolio is down 23 % during the first six months of 2016. In Q2, the average is minus 14.7 %. In comparison, the SPI-index (all Nasdaq-shares in Sweden) is down 4.3 % in 2016 and down 1.3 % in Q2. Compared to the performance of the portfolio in 2015, where the full-year result was +78.6%, 2016 seem dull and depressing. Check the December update for details.

I have marked the three worst performing shares in red – and the only rising shares in green. There is no doubt that A1M Pharma and Recyctec lost much value during winter and spring. Lately I participated in the issue in A1M with a (low) offering price of 2.60 SEK. Now, a few weeks later, and even before the newly issued shares are registered, the price is down 15 %. Luckily, A1M is my smallest position. I hope that from here on the price can only go up! On contrary, I am not worried about Recyctec. The company is close to a breakthrough and when I read this in December, I am probably sorry I did not buy additional shares here in July, when the price was (still) low. See my latest update on Recyctec.

Issues affect portfolio performance

A poor performance always calls for explanation. Here are some of them: issues and company progress.

The first is share issues: Only three of the companies in the portfolio has not made issues during the first half of 2016: AroCell, Heliospectra and Fortnox. The rest of the companies have asked for funds for further expansion. See the table below.

Issues in 2016

The many issues have of course put a lot of pressure on the individual share prices. I assume we will not see any issues during the rest of 2016 and thereby removing some of the pressure.

The many issues and IPO’s have additionally put pressure on the general market of start-ups. When there suddenly is an explosion of new companies investors at some point run out of money. If they want to participate, they start selling shares. Personally, I have not participated in IPOs due to the issues among the shares I already have in my portfolio.

This pressure might lessen in the last part of 2016. Even though a high number of new IPOs is announced, the ones we have seen lately has not all been successful. In June, both BrainCool and A1M experienced this beginning issue-fatigue. BrainCool hoped for 22 MSEK but only reached 14 and A1M only reached their target due to the guarantors buying the last 37 % of the new shares.

Portfolio performance an company progress

The next explanation is the performance of the individual companies. Cantargia, AroCell and A1M are at stages in their development, where investors just have to wait. There are no significant trigger events within months and the best you can hope for is a stable price. A1M obviously cannot deliver this. None of them is close to market, so the motivation for a rising share price could be encouraging research results and patents granted.

The share price CybAero is up because they at last can three delayed systems. The plan was to part-deliver in June, September and November. This plan is now revised and all three systems are to be delivered by end-August.

Dignitana announces steadily new clinics and hospitals acquiring their DigniCap systems. More 1Dignitanablogger have pointed out that the expected number of systems in use, mentioned in the prospect prior to the issue, seems conservative compared to the actual pace of making contracts. Often shares do not ‘recover’ immediately after an issue, but in the case of Dignitana, the development lately indicates that the share will not follow this pattern. The present share price is well above the level in mid-May when the company announced the issue.

Nexam and Heliospectra are both struggling for their definite market break through. Nexam 1Nexamwork focused on scaling up the business and so are Heliospectra. Their approach is different since their industries are different, but both seems to be very determined. Lead times are long and probably longer for Nexam, and at some point investors get impatient or nervous. Since there have been no major break for neither of the companies, share price have down wards sliding. A business update from Nexam from the CEO is availably (audio in Swedish) . Unfortunately, he does not reveal the purpose of making an issue of 129 MSEK, a huge amount compared to other companies at the same size, but it is worth noticing the slide presenting organic vs. acquired growth. My best guess is that the company will make an acquisition, enabling the company to produce mixed plastic (and not just additives).

BrainCool still have not recovered from the issue in June. Before the issue, the price level was 1BrainCoolabove 14 SEK and the issue price was 11.55 SEK (completed at June 17th). At present, the price is around 12 SEK. The pace of the company seem very high and probably after two or three positive press releases, investors will forget the issue and the share will recover fully.


Phase Holographic made an issue in March, but never seems to have recovered. Since mid-Phase HolographicApril the price have gone from 32 SEK to 23-24 SEK. The share have entered a phase where only larger orders will affect the price. And of course general turnover in quarterly reports. After the last issue the hype around the company have vanished. Even though some bloggers still quote lengthy scientific papers where HoloMonitors have been used. The effect on share price as we saw some months ago, have gone.


Fortnox – talk of the day

Fortnox has its own, very peculiar story. The Norwegian company Visma made a bid for Fortnox 1Fortnoxof 24 SEK per share in March (app. + 1/3 of the price). A very large majority of the shareholders wanted to sell, including me.  This week Konkurrensverket (the Swedish competition authority) announced that they would take the bid to court to prevent the sale. At that point, Visma cancelled the offer. Buying Fortnox would give Visma a too dominating position on the market. Along the probable sale, or perhaps triggered by it, there has been a struggle for power among the larger owners. This made the CEO leave the company (announced some time ago). At the general meeting four of six board members was replaced. The meeting was held the same day as the offer was cancelled – on  June 28th.

After the cancellation of the offer, the share fell from 22.4 SEK to 15.40 SEK and trading was suspended for some time. In mid-March as Visma made the offer, the share price was 18-18.3 SEK. I expect the share to regain that level shortly since growth have been high and the Q1 report showed progress in margins. Furthermore, a number of positive announcements have been made since the Q1-report: new procurement services and lately a cooperation with EY. The Q2-report will arrive August 18th. After the general meeting the dividend (0.16 SEK) arrived at my account – Fortnox is the only dividend-paying company in the portfolio.

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