A sustainable, financially strong and motivated main owner
As in recent quarters, the vast majority of companies have already exceeded high expectations in the first quarter of the year. In many cases, this means that the large share price gains for most shares over the past year can be defended. At the same time, the leading central banks have continued to emphasise that their expansionary monetary policy will continue since the rising inflation we are now seeing is expected to be temporary.
Many investors are now wondering what will drive prices further upwards when we already have record growth in combination with all-time-low interest rates. The march of the coronavirus and its delta variant, and the fact that large parts of the world’s population have still not received vaccinations, is also creating concern about growth prospects in the autumn and further ahead. This may explain why some stocks actually fell despite strong reports that beat analysts’ forecasts.
The fund’s holdings also met expectations, and the positive performance continued in July. One of the fund’s older holdings, Elanders, has gradually become a smaller part of the fund − approximately 0.5 percent a year ago − as a result of relatively weak share price performance. But hard work pays off. Over the past year, Elanders has shown that its transformation from a focus on printed products to complete solutions in printing and packaging, and turnkey customer supply chain management has been a success. Consequently, this holding alone has contributed approximately 1 percentage point to the fund’s performance over the past year after the share returned a total of 170 percent. With the business’s current margin of just over 5 percent, there is still some way to go to its target of at least 7 percent. The previously relatively high debt has been reduced and there may even be scope for loan-financed expansion. Add to that a long-term, financially strong and motivated controlling shareholder in Carl Bennet, and Elanders continues to look interesting despite the share’s recent strong performance.