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Bright future for undervalued Fenix

The Stockholm stock exchange rose 3.5 percent in December and Carnegie Småbolagsfond was up 5.9 percent.

Fenix Outdoor, which owns the important Fjällräven brand, was the month’s most positive contributor as its share rose 28 percent. Fenix Outdoor is an exciting company with a bright future ahead, and its outdoor focus will benefit from greater interest in health and the environment. The Fjällräven brand is very strong, but the group’s other marques are also exciting.

However, Fenix Outdoor has experienced protracted IT and logistics problems, which have had a negative impact on both sales and earnings. Given this, and a weak European clothing trade during the year, we think Fenix Outdoor is performing very well. In its interim report for the third quarter the company announced that its IT and logistics problems should be resolved as of 2020.

We expect good profit growth in 2020 and, in light of this, the share is undervalued.

Arjo joined as a new holding. After its spin-off from Getinge, this medtech company has a clear focus on profitability and we anticipate a good 2020. We expect a stable sales trend and that improved profitability will drive profit growth. We consider also it likely that Arjo will make acquisitions that could further contribute to profits.

The company has very skilled management and we believe the valuation is attractive given its future prospects. The share rose 6 percent in December.

Concentric is a favourite that has long been in the fund. A December update on the company’s electrification business appears very interesting. There have been concerns that electrification will have a negative impact on Concentric, since fuel pumps are adversely affected, but it turns out that the total value of its potential sales for electric vehicles are several times greater.

Electric pumps for applications like cooling electric powertrains have a greater value than pumps for a traditional vehicle. Breakthrough orders have been taken and the future certainly looks interesting. The share rose 9 percent in December.

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Småbolags­fond A

Carnegie Småbolagsfond investerar i mindre värdebolag på Stockholmsbörsen. Mindre bolag har historiskt haft en starkare kursutveckling än större företag, de har större möjligheter att växa och blir oftare uppköpta. Detta...

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