Report season

Report season

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The companies in the portfolio have matured over the past year. Rise in turnover is more a topic today than a year ago, and sales becomes increasingly a share price driver. Having just ended third quarter, the report season is up and interim reports will soon start ticking in. In general, smaller companies report later than large cap companies. The majority of the companies in my portfolio will report in the last half of November. Only Heliospectra and Recyctec will report in October.

The companies listed marked with a star (*) are companies where rise in sales and profit influences the share price. The most mature company in this group is Fortnox, who even pays a dividend. Lately the share has gone up and hopefully the growth in turnover and profit will justify this steep rise.

report season Q3-16

The rest of the star marked companies are striving for breakeven. Judged by their own 1Recyctecpredictions Recyctec are the company closest. This week the company announced start of sales of EarthCare glycol and a turnover the first week of 300,000 SEK. In comparison the turnover of the first six months of 2016 was 882,928 SEK. There were problems at the production site during summer, consequently sales might still be limited in the Q3-report. Numbers will probably lift substantially during this fourth quarter.

On track to break even?

Personally I am quite curious on the report from Dignitana. The company reported unimpressive turnover in H1 (half of turnover in 2015), but with still more clinics acquiring the 1DignitanaDigniCap system, turnover must start rising soon. October 4th the company announced five new, Californian clinics adding up to 47 clinics in total using the DigniCap system. By the end of July, the number of clinics was 32. From Dignitana and a clinic have signed an agreement until the systems are delivered, and the staff is trained some time will pass. By now deliveries made in the first half of 2016 must generate turnover on a steady basis. Since August the share fallen from above 20 SEK to below 18 SEK.

The next group is Heliospectra, Nexam Chemical and Phase Holographic. They all have rising sales, but are some distance from break even. Heliospectra has the highest turnover, but also the highest loss. Substantial lift is sales and turnover could influence the share price, but still main triggers are single orders or other business related events, more that sales.

The latest newcomer in this group of turnover generation companies is BrainCool who started 1BrainCoolsales in 2016 and had a turnover of only 240,000 SEK in Q2. In September the company received an initial order for the Japanese market of 10 systems. There was no indication of the price but depending on distributors margins my guess is that the order is approximately 1.5 MSEK worth.

 

Report season as non-event

At their current phase, reports from A1M Pharma, AroCell, and Cantargia will show no turnover and the reports will be a non-event. I only keep an eye on the burn rate and compare it to cash level. Apart from that all interesting information occurs between the reports. CybAero only reports half and full year.

Check out my growth share portfolio, the share price trigger list or my EGS (Evaluation of Growth Shares) Model.

2 thoughts on “Report season

  1. kenneth

    Hi,

    Could you tell us about your investment strategy? I also invest in swedish growth shares, but my investment strategy is to stay close to market dynamics and news, and continously re-think my share selections. For example, A couple of weeks ago, I invested in Zenicor because news arrived that their scanning method would potentially become gold european standard. Thereafter, the shared rushed 200% in the next weeks, and I evaluated that the hype had taken the share to high in too short time. I therefore sold my shares, even though I believe in Zenicor long term. Ill enter again later on.

    I think especially with the swedish growth shares that one should be very adaptive, because most shares are highly volatile as they are per definition futures stars or dogs.

    In general I tend to evaluate on the basis of:

    -Triggers in the coming 12 month period
    -Market value
    -Insider share buying
    -Indications of market interest

    At the moment Im heavily invested in Interfox Ressources. It is also high risk, but I evaluate the probability to be high that theyll succeed with their negotiations with Fame Dragon.

    Apart from that Im invested in

    -Medical Prognosis
    -Optifreeze
    -Double Bond Pharmaceuticals

    I will be investing again in
    -Idogen
    -Peptonic
    -Zenicor
    very soon. Maybe also Raybased, but Raybased is an example of a share that I was long in until recently when it skyjumped. Now, I do not see any big potential in the near future

    Reply
    1. Anders Lykke Nielsen Post author

      Hi Kenneth. Thanks for your comment. I’ve been away on holiday – if you wonder why I have not responded earlier.

      My investment strategy is more long term than yours. I pick the companies and in most of them I stay, and participate in issues and ups and downs. Sometimes I try to move in and out to avoid losses when company announces issues etc. or to harvest from hypes. Then I often go back in some time later. The last example was Heliospectra – event though I did not succeed, since the issue announcement came earlier than expected and perhaps I was too optimistic about the price I could get:-). That cost me about 30 % in an hour or two.

      I try to build a portfolio to level out risk – even in a risky investment game as Swedish growth shares. I keep at least 10 shares (11 at present). Then I try to mix them in in terms of their matureness: A1M is very far from even having a product and a market (see my EGS-model) while on the other hand Fortnox have high margins and pays out dividends. I mainly pick shares with a potential global potential. This in fact favours medicine, IT and med-tech, I know.

      The size of positions I try to adjust in order to optimize my gains. In 2016 it has not worked according to my hopes – last year it did. Some of the individual shares have not performed as I hoped – Nexam as an obvious example. When we entered 2016 I thought it would be the breakthrough year for Nexam. It hasn’t and it is down 22 % this year.

      I hope this answers your question. Do all your positions come out as successful as Zenicor?

      Reply

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