After a couple of years of hiatus, a look at Finnish stocks and their valuations. Of course, P/E alone doesn't tell the whole story. OMXH25 has returned ~30% in a couple of years. S&P500 has gained ~50% in the same period → some kind of defensive gain toox.com/Mikko_M_Makine…pP 1/X
Almost two years ago, there were both good and bad comments in the thread. Forecasting is notoriously difficult – especially for the future. In the market, advantage comes from a few insights. If you imagine that you have it in every stock, you suffer from a serious overconfidence bias. I use a 12-month forward forecast in these. It has its flaws (including slight optimism), but I think it's the best way. So the indicators are about valuation, not share price.
Nokia (3,625) - The growth in the first half of the year came from data center dreams. P/E 8 -> 15. - These dreams are not reflected in the numbers, even though the boom is on -> the stock is back down. -28% from the peak. - Nokia is not expensive, but do I want to own a serial cheater who doesn't grow? I have too many wounds from this myself.
Sampo (10.00) - The sector has been in strong demand. The company is pushing the envelope efficiently and well-managed. - Seems fully priced (P/E 18). I personally avoid the insurance sector due to pricing right now. - Shareholder yield (div + bb) still 5%.
UPM (24.57) - The pulp cycle wasn't eternal (they never are) - 6% dividend yield, and still free cash flow covers it even in a weak market. - Pros: pulp, energy, niche paper products. Cons: base paper. - I've bought on the decline, even though I need it for the rest of the year.
Orion (69.60) - In pharmaceutical companies, the best time to sell is often well before blockbuster sales peak. - Orion's R&D is unnecessarily modest in relation to turnover. Now Nubeqa is taking a moment to get high. - The share could be worth more in the next few years. It seems "cheaper" all the time.
Kone (53.78) - P/E 25 is not cheap, but the service business is a really high-quality business and the world is building upwards. - A couple of years ago the valuation was more attractive - now I would only be interested in buying on the dip. - China's construction is unlikely to return to its old high?
Metso (11,12) - Fewer rich ores, but more raw materials needed -> More need for crushing and other processing. - Benefits from building infrastructure, electric cars and data centers. - I own much cheaper, less expensive. Now a little more expensive again.
Neste (14.70) - More than doubled from the bottom! (unfortunately, I already owned the downside) - The next 12-month P/E is not very relevant for turnaround companies. - The price of European renewable diesel has returned to a level where it makes a profit and anti-fears could be abandoned. - My old ownership is enough.
Huhtamaki (31.02) - Very international and resilient. Production in the United States as well. - The share is at its lowest price in ten years. - The company is not great, but I own it because of the cheap price. I would sell for a 20-30% increase unless performance improves substantially.
Wärtsilä (24.23) - Everything that can be connected to data centers is shining right now. - Wärtsilä has the reputation of a quality company, but compared to that, its earnings and shares have fluctuated too much. - Maybe expensive for a reason, but not interesting at these prices.
Fortum (15.13) - The share and earnings forecasts have gone in different directions since the beginning of the year. Electrification and data centers are driving the price, but it is not yet reflected in the price of electricity futures. - I am following the share closely, but I do not currently own it. Hydropower and nuclear power are interesting for the portfolio
Elisa (45.90) - Something like this profiled stock is good to own as a safety net in a bear market. But even too boring for me. - Probably reasonably priced for one of the best telecom operators in the world.
Stora Enso (10.03) - I bought speculatively after the news of the separation of forests - the rest of the business is not exciting, but its valuation will remain quite low when the forests are taken out. - The value of the forest company would decrease if relations with Russia were restored → relative loser compared to others.
Kesko (19.62) - Reasonable valuation for a stable company (P/E 16). Construction & car sales could bring profit growth as soon as Finland's frozen economy thaws. - But: loss of market share and still expensive product prices in this economic cycle are worrying.
Konecranes (73.40) - I sold these far too early, and I was anchored to the sale price, and I couldn't buy higher. What a mistake. - Now the result is already at a very good level historically, and the odds have risen. Not the best combination for the expected return.
The intention would be to look at smaller and international companies in the same way sometime later. Original thread: