Thursday, 19. October 2017  
31.05.2017 19:17
Author: Nic Wright

STOCK SCREEN: Potential Turnaround Situations With Significant Upside To Intrinsic Value (Part 3: Northern Europe)

 

Major US indices are touching all-time highs, helping push some stocks to levels where many stock analysts see little upside. Fundamental investors might increasingly look at stocks that haven't performed well as poor fundamentals have limited upside in the past. But the economic framework in which companies are working in can change quickly.

 

Recently, the U.S. president cited a number of statistics about the predicted economic impact from abandoning the climate deal, including a $3 trillion increase in gross domestic product, 6.5 million industrial sector jobs saved and preventing a 86 percent reduction in coal production, all by 2040. In a rapidly changing approach to regulation, clean energy, industry and infrastructure, by the U.S. government, economics and frameworks in which companies are acting can also change rapidly.

 

Regulatory changes in th U.S. can influence companies around the globe, which is just one more reason to take a closer look at potential turnaround stories in the stock market. Investments in distressed companies can produce enormous gains, if the recovery is successful. However, almost two third of all distressed companies don't recover, and some decay into bankruptcy, where equity holders usually get wiped out and bond holders may get a partial or full recovery.

 

In looking for ideas this week, we screen, in part 3 of our Turnaround Stock Screen series, the Northern region of Europe for companies that have declined in market value over the last 5 years, are significantly below our AVM’s fair value and have stabilized in market value during the last 6 months. Above that we require supportive director’s dealings within the last 12 months.

 

Here are the filter criteria:

1. Market capitalization above 0.5bn.

2. Upside to Fair Value according to one of our AVM’s value estimates.

3. Share purchases by directors within last 12 months.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

PRICE / BOOK

DIVIDEND YIELD [%]

 DNO ASA

 Norway

8.24

1064

121.3

-100.0

-100.0

1.9

0.0

 EKORNES ASA

 Norway

103.00

3793

1.9

9.2

-21.9

3.7

5.5

 FINNAIR OYJ

 Finland

5.24

669

15.0

-96.6

-22.5

0.7

2.3

 KVAERNER ASA

 Norway

11.65

3134

124.8

33.9

112.6

1.1

0.2

 Q-FREE ASA

 Norway

8.90

794

13.1

-100.0

-100.0

 

 

 SPAREBANK 1 SR BANK ASA

 Norway

70.00

17903

-22.7

3.3

43.0

0.9

4.1

 STOREBRAND ASA

 Norway

55.60

25015

-14.1

-31.5

5.0

0.9

3.9

 WILH WILHELMSEN HOLDING-A

 Norway

246.00

1345

164.5

18.4

57.4

0.6

2.7