Telia and SCA are attractive
Construction company reports, including Skanska and NCC, were a pleasant surprise with good profitability and order intake. This indicates they are well on their way to achieving communicated profitability goals, although coming quarters will of course be adversely affected.
Dometic communicated that its financing is secured, which reduces the risk of any capital injection from shareholders going forward, something the market had been worried about.
Volvo’s report met a more downbeat reception despite very strong quarterly figures. The negative reaction is probably explained by the current situation being described as challenging, without any beautifying words. How could that have been a surprise? AtriumLjungberg was also severely punished for describing an uncertain future and making a small write-down of property values. It is worth noting that, amid the crisis, it still divested Farsta Centrum at really good terms.
The fund rose 8.7 percent in April, which means the decline since the start of the year is 13.2 percent. The share of equities is largely unchanged at about 60 percent.
Changes worth mentioning on the equities side are that the fund bought shares in Telia and SCA. On cue, the Telia share showed relatively good resilience at the beginning of the stock market downturn, but a returning risk appetite combined with a worse report than expected to recently have a negative impact on the share. We believe the stock to be interesting at current levels. Expectations of what the new CEO Allison Kirkby, formerly of Tele2, will be able to do are probably now reasonably set.
The holding in SCA was also expanded this month. One positive from its latest report is that the company expects to be able to increase its forest harvest by 25 percent by 2025.
We have reduced the risk in the bond portfolio by selling some high yield holdings and instead buying bonds in Industrivärden and investing in Carnegie Likviditetsfond in order to create preparedness to act in the event of future dips in the equity and corporate bond markets.