Dometic was the fund’s best holding in April, with a gain of 48 percent. We upped our stake after the March slump, and it still has some way to go to reach pre-virus levels despite this fantastic surge. Will the share claw back all its losses?
We see no reason why not. Fears of a new share issue were swept away by April’s interim report, and the company has reached an agreement with its lenders. This was one of the main reasons for the price drop.
We have also seen motorhome and boat manufacturers, Dometic’s customers, resume production one by one in April. This is limited, but we are undeniably moving in that direction. As country after country now cautiously open up their economies, the service market is also coming back to life. Something that is already at full speed is the rental market for motorhomes, and reports suggest the almost everything is fully booked for the summer. This is an indication of an interesting question for the long term. Will we take more staycations in future? There is plenty to suggest this will be the case and, if so, Dometic will certainly be a clear winner.
Stillfront continues at its high pace. After acquiring Storm8 in January, it bought American Candywriter in April. As usual for a Stillfront acquisition, it looks attractive from both strategic and financial perspectives. Once both Storm8 and Candywriter are integrated in Q2, together with the strong organic growth there will be a foundation for very strong profit improvement. The share price performance has been good, up 32 percent in April alone, but the valuation is still attractive thanks to the good profits.
Computer game company Embracer joined the portfolio in April. We participated in the company’s capital raising at what we judged to be an attractive price. And this investment has been successful in the short term. The company usually carries out capital acquisitions ahead of structural deals, so perhaps it will soon be time for an acquisition. We greatly admire this company, which is led by CEO and main shareholder Lars Wingefors.