Dream deal for Nent
Carnegie Småbolagsfond rose 0,2%.
The good news this month was Nordic Entertainment, Nent, with its share price up 19%. It pulled off something of a dream deal by merging Viasat Consumer with Telenor’s Canal Digital.In addition to significant cost synergies, we envisage greater reach for both Viasat’s channels and Viaplay’s streaming service. It is also worth noting that Canal Digital was a clear competitor. We own Nent for the low valuation, because we judge that the linear TV business is more resilient than one might think, because the TV advertising market remains strong, and not least because the Viaplay streaming service is developing well and building great values. We have increased our holding.
Nordic Waterproofing, which has long been one of our favourites, reported strong results on the last day of the month. The company, which mainly deals with roof membranes, has previously been wrongly associated with Swedish housing construction despite only a fraction of its sales going in that direction.
Both Denmark and Finland are larger markets, and both renovations and commercial buildings are more important than newly built homes for Nordic Waterproofing. In the third quarter of the year, sales grew by 16%. Ten percent was organic, 4% from acquisitions and 2% from foreign exchange. Add to this good profitability growth and low valuation multiples, and we get a pleasant outcome. The share rose 9% in October.
The positive performance of the real estate sector has benefited the fund for a long time. The weight of the sector in the fund has roughly reflected its weight in the small caps index. In October, the sector was adversely driven by weaker net leasing from some of the reporting companies, slightly higher interest rates and, perhaps above all, strong development for cyclically sensitive stocks. The real estate sector sometimes becomes a source of financing. We see no drama in what happened.
AtriumLjungberg and Hufvudstaden are traded at substantial discounts in relation to their net asset values. Fabege is traded on a par with its net asset value, and here we have reduced our holding.