Tag Archives: Nexam Chemical

Shares in 2018

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Well, Trump and Brexit hit the share market hard in December. Probably it affected every corner of the global share markets. Even the Swedish were I invested my money. Looking back on 2018 a few shares performed very well – and too many performed awful. In 2018, I even experienced the first bankruptcy, as CybAero had to close and the shares lost their value. The 2018 newcomer is PolarCool, a spin-off from BrainCool, who had its debut on Spotlight market at the end of November.

2018 share pride development. (* New in November, ** Bankrupt in June)

Losers in 2018

In general the broad Stockholm index (OMXSPI) lost 7.7 % during 2018. The average loss in my portfolio was 10.4 %. Again this year (as in 2017), my portfolio performed worse than the index.

The main culprit is of course CybAero with a loss of 100 % as the share lost its value after the bankruptcy in June.

A1M Pharma also lost a significant part of its value during the year. To make things worse, A1M announced yet another preferential rights issue shortly before Christmas. During autumn, there came a new CEO and new chairperson of the board. NASDAQ has furthermore placed the share on the observation list. Since the IPO, there have been an issue each year – 2015, 2016, 2017, 2018, and now 2019 – weighting the share down heavily. The share lost 90 % of its value in 2018.

In terms of investor value, PolarCool did not bring much to the portfolio. On its first day the share lost approximately 50 % of the issue price of 2 SEK. This continued through December and with a closing price of 0.56 SEK on Friday, the share is down 72 %. I hope the company will be more successful in 2019 as the product can limit the damages caused by concussions in sports.

Waystream performed almost as bad. Down 69 % during the year due to low sales. The reaction during the year was harsh, and to some extent, unjust. The present market cap is 21.1 MSEK – compared to a turnover from January to September of 57.3 MSEK. Higher sales will probably lift the share significantly. Of course, I hope it will happen soon.

Winners then

Dignitana is up 79 % during 2018 despite an issue in December. If we go back two years, the price was 19.30 SEK so there still is some steps ahead before we reach the former levels. Probably Dignitana will start to generate cash in 2019.

Heliospectra is up 60 % almost recovering for the loss in 2017. During the year, the share had two peaks. One in January where it shortly went above 10 SEK and one in July where it peaked at 9.74 SEK. Lack of announced orders caused it to fall back, I think. Personally, I am a bit worried about the lack of announced orders in November and December. Right now orders seem too few.

Fortnox went up 55 % in 2018. This follows the 45 % rise in 2017. Of the shares in the portfolio, Fortnox is the most stable growing share. On several occasions during the second half of 2018, the share even has been above 80 SEK, with a top at 84.50 SEK in late august. I tend to think that a price SEK 80+ is fine, but the P/E at that share price is too high. I am sure we will see these SEK 80+ levels again during 2019 as Fortnox both extends the number of costumers and their individual spending. In Q3, the turnover growth was 38 % with an operating margin of 34 %.

It is difficult to make predictions – especially about the future

There are a number of companies where a crucial element in 2019 will be the growth in sales. In mature companies this along with the ability to earn profits are of course the main driver for the share price.

For many of the companies in my portfolio selling products and earning profits are the next step. Some still do not have products to sell. Cantargia and A1M Pharma are the best examples with years ahead before their products will reach consumers.

A number of companies have some sales, but they are still struggling to reach breakeven. This goes for AroCell, BrainCool, Dignitana, Heliospectra, Nexam Chemical, Recyctec, Phase Holographic, and PolarCool. Of these, I think Nexam, Dignitana and perhaps Recyctec are the most likely candidates to reach a positive cash flow and perhaps even breakeven in 2019.

Waystream balances on breakeven and if they manages to return to positive cash flow and earn profits, I guess we will see the share go up again.

Fortnox and Hexatronic both earn profits and grow. Their share prices have developed quote opposite, though. Where Fortnox have grown organically, Hexatronic have grown through acquisitions during 2018. I expect both companies to grow significantly during 2019. I hope that Hexatronic will resume its organic growth along the acquisition-based growth.

Then there is Trump and Brexit. Both injects uncertainty into the market – which always will make shares fall. A hard Brexit will directly affect a number of companies in my portfolio. Hexatronic have identified UK as a priority market and a number of BrainCools studies have been conducted in the UK. Nexam have production facilities in Scotland. With a weaker UK economy, they will have trouble on the UK market, and trouble moving products from UK to the rest of Europe. In truth this might be more important than individual company specific drivers.

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

Hard and unjust punishment of Nexam after Q1 report

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The Q1 report from Nexam came on Wednesday. This is the first report for a full quarter after the acquisition of Plasticolor. Of course, this makes comparison difficult. Nevertheless, I cannot find reason in the report for a 9.4 % fall. The market reaction seems both hard and unjust. Continue reading

Ups and downs

Time for the yearend report – Ups and downs in February

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The past two weeks have had its ups and downs. These weeks are really the high season for companies announcing their yearend report, but also other news have had their impact. From an investors perspective some has been good and some has been bad – but among the bad, hides a one that is really bad, almost catastrophic. I will come back to that later. Continue reading

year-end reports

Year-end reports approaching

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During the next four weeks, there will be a stream of year-end reports. Large companies probably with many resources have already made their reports public. Small companies as the ones in my portfolio often comes later. All of them except CybAero (March) and Phase Holographic (does not follow calendar) will report during February starting with Fortnox on Friday the 9th and ending with Cantargia on the 28th. Let us start with the reports containing least surprises. Continue reading

Nexam acquires Plasticolor

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Friday morning finally came the press release investors in Nexam have been waiting for during more than a year. The acquisition! Nexam acquired a master batch producer, and now have access to production capacity. Before the acquisition, Nexam had a small production site in Scotland. After there will be sites in Sweden, Poland, Ukraine, Serbia and Hungary which will add to capacity. Continue reading

Portfolio overview Q317

Towards the end of Q3 – portfolio overview

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A portfolio overview here at the end of Q3 would be appropriate. It will indicate what to look for in the upcoming Q3 reports. The past months have been rather quiet and except for BrainCool, only minor news have occurred. Nevertheless the next months might give some answers. Continue reading

A fine report from Nexam

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Nexams Q2-report, which came out on Friday, was pleasant reading. Nexam now reports sales in all three focus-areas and turnover is the highest ever. Clearly, the company is on the right track. Their customers now return with even larger orders as their products with Nexams chemistry gain market. Nevertheless, the share lost 1.6 % after the report. This year the share is down 27 %. Continue reading

Portfolio overview Q317

Before the half-year reports

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The next three weeks are the traditional season half-year reports for great many companies. A few companies publish their reports in July, but most do in August after the summer holidays. The majority, especially among small companies, will however show up during the last weeks of August. For companies with no turnover reports are non-event. Mostly a burn rate test. For companies with beginning sales, though, perhaps near their first profitable month or quarter, a report can turn the share price upside down. Continue reading

Recyctec

Insider buying in the portfolio

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During the week, I decided that I would make a review on insider trading in the portfolio. It turned out that the majority of the insider transactions was part of the preferential rights issues. This goes for A1M Pharma, BrainCool and Cantargia or as part of an options programme (Phase Holographic). In AroCell and Fortnox, newly appointed managers bought a number of shares. Continue reading