SKAGEN Vekst Status report – May 2014

SKAGEN Vekst
Statusrapport – juni 2016
Hovedtrekk – juni 2016
• Brexit (eller engelskmenns valg om å tre ut av EU samarbeidet) førte umiddelbart til store negative
reaksjoner i de globale aksjemarkeder så vel som valutamarkedene. Fondet ble særlig berørt av stor
eksponering mot europeiske aksjer og desto lavere andel mot amerikanske aksjer i en periode hvor
USA ble sett på som en trygg havn. Fondet oppnådde en negativ avkastning på 5.3% mens
referanseindeksen var ned 3%.
• De beste bidragsyterne i juni var Samsung Electronics, Oriflame og TTS Group, mens Continental,
Norwegian og Norsk Hydro bidro mest på den negative siden.
• Aksjemarkedene har ved månedsslutt ristet av seg det verste sjokket som Brexit medførte. For våre
aksjer er Brexit fortsatt synlig hos selskaper innen bankvirksomhet og for selskaper med direkte eller
indirekte eksponering mot bilindustrien. Flyselskapet Norwegian fikk en kraftig negativ reaksjon i
aksjekursen, noe skyldes Brexit, men mest på grunn av negative framtidsutsikter meldt fra to av
konkurrentene (EasyJet og British Airways).
• SKAGEN Vekst porteføljen består av 53 selskaper hvorav de 35 største posisjonene utgjør 92 prosent
av totalen. To nye selskaper ble tatt inn i porteføljen siste måned, farmasiselskapet Shire PLC og
gjødselprodusenten CF Industries.
• SKAGEN Vekst fortsetter å være et aktivt aksjefond med solid forankring i vår verdibaserte
investeringsfilosofi. Fondet prises nå på 12 ganger årets inntjening, betydelig lavere enn det generelle
markedet som prises rundt 16 ganger inntjeningen.
Om ikke annet er sagt er alle avkastningstall i rapporten for klasse A etter honorarer. SKAGEN Vekst sin referanseindeks er
en likt sammensatt indeks bestående av MSCI Nordic Countries Index og MSCI All Country World
2
SKAGEN Vekst vs Indeks vs USD-NOK
Usikkerhet skaper svingninger i juni
3
A
Avkastning, juni 2016
A
juni
SKAGEN Vekst A
Referanseindeks*
Meravkastning
QTD
-5,3%
-3,0%
-2,3%
YTD
-3,9%
-0,6%
-3,3%
1 år
-8,9%
-6,9%
-2,0%
3 år
-4,9%
1,2%
-6,1%
5 år
9,6%
16,5%
-6,9%
10 år
5,9%
13,1%
-7,2%
Siden start*
4,5%
13,7%
7,4%
10,1%
-2,9%
3,6%
Note: Alle avkastningstall ut over 12 måneder er annualisert (geometrisk avkastning). *Startdato: 1 desember 1993. **Fondets investeringsmandat ble endret
med virkning fra 01.01.2014 fra at fondet investerte minst 50 % av sine midler i Norge til at fondet investerer minst 50 % av sine midler i Norden. Tilsvarende ble
fondets referanseindeks endret fra en likt sammensatt referanseindeks av Oslo Børs Hovedindeks (OSEBX) og MSCI All Country World til en likt sammensatt
referanseindeks av MSCI Nordic Countries IMI Index og MSCI All Country World Index ex Nordic Countries. Referanseindeks før 01.01.2010 var Oslo Børs
Hovedindeks (OSEBX).
4
Årlig avkastning siden start* (%)
SKAGEN Vekst (NOK)
Benchmark Index (NOK)
77
66
48
48
38 40
32
32 32
46
39 32
29 32
65
19 15
12
7
48
10 11
-6
-27
-2 -2 -1
-17
-22
15 16
25 29 23
19
15
12
10
7
-9
-20
-9 -7
-31
-44
-54
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Hittil
i
Note: Alle avkastningstall ut over 12 måneder er annualisert (geometrisk avkastning). *Startdato: 01.12.1993. **Fondets investeringsmandat ble endret med 2016
virkning fra 01.01.2014 fra at fondet investerte minst 50 % av sine midler i Norge til at fondet investerer minst 50 % av sine midler i Norden. Tilsvarende ble
fondets referanseindeks endret fra en likt sammensatt referanseindeks av Oslo Børs Hovedindeks (OSEBX) og MSCI All Country World til en likt sammensatt
referanseindeks av MSCI Nordic Countries IMI Index og MSCI All Country World Index ex Nordic Countries. Referanseindeks før 01.01.2010 var Oslo Børs
Hovedindeks (OSEBX).
5
Markedsutvikling i juni 2016 i NOK (%)
BRASIL
INDONESIA
CHILE
SØR-AFRIKA
MALAYSIA
KOREA
TAIWAN
SINGAPORE
NEW ZEALAND
THAILAND
TYRKIA
CANADA
RUSSLAND
KINA
HONG KONG
INDIA
MEXICO
USA
JAPAN
SVEITS
FINLAND
MSCI Nordic/MSCI AC ex. Nordic
NORGE
POLEN
PORTUGAL
UNGARN
SKAGEN Vekst A
TSJEKKIA
DANMARK
SVERIGE
UK
TYSKLAND
FRANKRIKE
NEDERLAND
ØSTERRIKE
SPANIA -13
ITALIA -13
6
15
8
5
2
2
2
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-5
-6
-6
-8
-8
-9
-10
-7
-7
0
0
0
0
1
4
4
4
6
Markedsutvikling YTD 2016 i NOK (%)
BRASIL
RUSSLAND
THAILAND
NEW ZEALAND
INDONESIA
CHILE
CANADA
SØR-AFRIKA
TYRKIA
UNGARN
TAIWAN
MALAYSIA
NORGE
KOREA
SINGAPORE
USA
INDIA
MEXICO
HONG KONG
MSCI Nordic/MSCI AC ex. Nordic
PORTUGAL
DANMARK
SKAGEN Vekst A
TSJEKKIA
NEDERLAND
SVEITS
FRANKRIKE
POLEN
JAPAN
UK
KINA
SVERIGE
TYSKLAND
FINLAND
ØSTERRIKE
SPANIA
ITALIA -31
7
31
10
9
9
8
7
6
6
2
1
-2
-2
-3
-3
-5
-6
-7
-7
-7
-8
-9
-9
-9
-10
-11
-11
-11
-12
-12
-12
-15
-15
-18
-19
13
13
Største poster ved utgangen av juni 2016
SKAGEN Vekst har 54% av porteføljen investert i Norden
Weight in
Price
P/E
P/E
P/E
P/B
Target
portfolio
Colum n2
2016e
2017e
2018e
trailing
price
Samsung Electronics
8,0 %
1 183 000
8,6
8,2
7,9
1,0
1 300 000
Continental AG
5,7 %
170
11,5
9,7
9,0
2,6
275
Carlsberg
5,5 %
635
18,6
16,0
14,2
2,2
817
Norsk Hydro
5,2 %
30
12,1
9,3
8,7
0,8
45
SAP
5,2 %
67
17,5
15,9
14,4
3,6
95
Citigroup
4,8 %
42
8,3
7,6
6,7
0,6
65
Norw egian Air Shuttle
4,3 %
288
9,0
5,8
5,2
5,2
500
Ericsson
3,9 %
64
16,1
12,6
11,8
1,4
88
Philips
3,5 %
22
16,0
13,0
11,5
1,7
30
ABB
3,4 %
166
20,6
15,8
13,9
3,0
220
Weighted top 10
49,6 %
12,0
10,0
9,1
1,41
40 %
Weighted top 35
92,3 %
11,2
8,8
7,7
1,19
49 %
16,6
14,7
13,2
2,04
.
Reference index
8
Viktigste bidragsytere i juni 2016
Største positive bidragsytere
Company
Største negative bidragsytere
NOK Millions
Company
NOK Millions
Samsung Electronics Co Ltd
78 ##### Continental AG
-60
Oriflame Cosmetics AG
14 ##### Norwegian Air Shuttle AS
-56
TTS Group ASA
6 ##### Norsk Hydro ASA
-37
Solstad Offshore ASA
5 ##### Citigroup Inc
-35
Medistim ASA
4 ##### SAP SE
-35
Bonheur ASA
2 ##### Credit Suisse Group AG
-30
Sodastream International Ltd
1 ##### Volvo AB
-28
Shire Plc-ADR
1 ##### Koninklijke Philips NV
-25
##### ABB Ltd
-16
##### Danske Bank A/S
-15
Verdiskapning i juni (NOK MM):-390
NB: Bidrag til absolutt avkastning
9
Viktigste bidragsytere hittil i Q2 2016
Største positive bidragsytere
Company
Største negative bidragsytere
NOK Millions
Company
NOK Millions
Oriflame Cosmetics AG
48
5E+07 Continental AG
-76
Samsung Electronics Co Ltd
34
3E+07 Ericsson LM-B SHS
-59
Sodastream International Ltd
20
2E+07 Norsk Hydro ASA
-33
Sberbank of Russia
20
2E+07 Koninklijke Philips NV
-29
Roche Holding AG
14
1E+07 Credit Suisse Group AG
-26
Medistim ASA
12
1E+07 SAP SE
-24
Lundin Petroleum AB
9
9E+06 Norwegian Air Shuttle AS
-20
Rec Silicon ASA
8
8E+06 Telia Co AB
-19
H Lundbeck A/S
8
8E+06 Kia Motors Corporation
-17
Kemira OYJ
6
6E+06 Investment AB Kinnevik
-16
Verdiskapning i 2Q (NOK MM):
NB: Bidrag til absolutt avkastning
10
-264
Viktigste bidragsytere hittil i 2016
Største positive bidragsytere
Company
Største negative bidragsytere
NOK Millions
Company
NOK Millions
Oriflame Cosmetics AG
69
# Continental AG
-148
Lundin Petroleum AB
29
# Credit Suisse Group AG
-118
Sberbank of Russia
25
# Citigroup Inc
-95
Casino Guichard Perrachon SA
19
# Ericsson LM-B SHS
-70
Samsung Electronics Co Ltd
18
# SAP SE
-44
Wilh Wilhelmsen Holding ASA
14
# Investment AB Kinnevik
-38
Volvo AB
11
# Kia Motors Corporation
-37
Catena AB
10
# Norwegian Air Shuttle AS
-33
Sodastream International Ltd
10
# Frontline Ltd
-29
# Nippon Seiki Co Ltd
-26
TTS Group ASA
7
Verdiskapning hittil i år (NOK MM):
NB: Bidrag til absolutt avkastning
11
-675
Viktigste endringer hittil i 2016
Økte poster
Reduserte poster
Q1
Q1
Hennes & Mauritz AB
(Ny)
eBay Inc
(Ny)
Catena AB
(Ny)
FLSmidth & Co A/S
(Ut)
Localiza Rent a Car SA
(Ut)
Bang & Olufsen A/S
(Ut)
YIT Oyj
(Ut)
Tribona AB
(Ut)
Casino Guichard Perrachon SA
Golden Ocean Group Ltd
ABB Ltd
Investment AB Kinnevik
Roche Holding AG
Ericsson LM-B SHS
Q2
Swatch Group AG
Philips Lighting NV
Nirvana Asia Ltd
Ericsson LM-B SHS
eBay Inc
Kemira OYJ
Hennes & Mauritz AB
12
(Ny)
(Ny)
(Ny)
Q2
Casino Guichard Perrachon SA
(Ut)
DOF ASA
Eidesvik Offshore ASA
Sevan Drilling AS
(Ut)
(Ut)
Lundin Petroleum AB
Telia AB
(Ut)
Kjøp og salg, juni 2016
Kjøp
Shire PLC
• Shire er et globalt ledende bioteknologi selskap med fokus på
sjeldne sykdommer.
• Disse sjeldne sykdommene er ofte misforstått, underdiagnosert
og kan i noen tilfeller være livstruende.
• Shire’s nylig inngåtte giftemål med Baxalta har ført til en økt
gjeldsgrad, men reduserte kapitalinvesteringer fremover gjør
dette håndterbart. Vi tror selskapet igjen vil vise til 16 prosent
årlig tilvekst, og vi anså det som en gunstig inngang i aksjen
etter et kursfall på 35 prosent.
Key sell
DOF ASA
• Det norske supply/subsea rederiet DOF ble solgt helt ut av
porteføljen. Selskapet annonserte en
restruktureringsløsning vi ikke fant attraktiv å delta i.
13
Sektor og geografisk fordeling mot indeks, juni 2016 (%)
Sektorfordeling
4
Energy
Fund
6
Index
7
6
Raw materials
19
16
11
9
14
13
Banking
& Finance
22
10
2
0
Latin America
0
1
Middle East & Africa
0
1
6
Health
11
4
Europe EM
10
Consumer staples
2
5
Europe DM
ex. The Nordics
14
Consumer
discretionary
20
20
IT
6
Oceania
4
0
0
Cash 0
10
North America
12
Telecom
14
Asia DM
Asia EM
Industrials
Utilities
Geografisk fordeling
0
1
54
49
The Nordics
2
Cash
Norden i SKAGEN Vekst
29
0
0
Sverige
Norge
Danmark
Finland
25
18
9
2
Nyheter og annet om
porteføljeselskaper
- på engelsk
Key earnings releases and corporate news, June 2016
8.4%% yield is just the beginning
Citigroup
(4.1%)
Investment case implications
Results of the 2016 Comprehensive Capital Analysis and Review (CCAR) confirmed our thesis – Citi has the financial
strength to significantly increase its capital return. Citi´s capital return plan was approved as the company passed
both the quantitative and qualitative part of the CCAR test. Specifically, Citi will increase capital return by 43% YoY
(dividends by 205% YoY and buy-backs by 29%). Compared to current market cap this provide a annualized yield of
8.4% (dividend 1.5% and buy-backs 7.0%%). As always, sustainability and future direction of the capital return is
much more important than the current level. On this point it is worth highlighting that the current 8.4% capital return
yield represent a 76% pay-out ratio on current years consensus accounting earnings (on cash earnings the pay-out
ratio drops to 64%). It is also worth pointing out, that current years accounting earnings is earned in an environment
with: i) very low interest, ii) a year where trading activity is depressed even compared to the sluggish period following
the financial crisis, iii) a year where Citi is adding to reserves (and lastly it is important to remember that last
Thursday’s stress test showed the currently balance sheet being significant over-capitalized). Thus, we still see
opportunity for significant higher capital return going forward.
Aside from Citi specifically, another important datapoint was that banks further ahead on the capital return path were
allowed to pay-out close to 100% of earnings - adding confidence to our thinking that the regulator is not as
unreasonable as the market seems to price in.
Summary
The Fed release results of the 2016 CCAR
3U update:
Unpopular: All global banks are disliked due to past behavior and increased cost of regulation.
Under researched: A lot of analysts, but they spend all their resources trying to forecast accounting earnings in the
next two quarters. Our focus is on the significant FCF generation (far in excess of accounting earnings) and how it is
used to buy back own shares well below fair value. Lastly, the market is concerned about how increased capital
requirements will depress ROE but forget that the same earnings is obviously worth more today as underlying
operational and financial risk is significant lower.
Undervalued: Yes, we buy an underlying and growing free cash stream at a very attractive starting yield (15%+).
Furthermore, a lot of that cash flow will be used to buy back own shares well below fair value.
16
Key earnings releases and corporate news, June 2016 (cont.)
TTS Group
(0.1%)
Austrian Palfinger bids NOK 5,6/share (60% premium) .
Investment case update
Offer is a bit light as it implies low probability for a turnaround of the company. However, SV has
accepted it on the back of following:
·
Company has repeatedly for the last two years openly informed the market that is
“reviewing strategic alternatives” but interest has apparently been lackluster and at the end
there was only one player willing to make an offer.
·
The major shareholders: Skeie family (chairman of the board), and Rasmussen gruppen
have all accepted the offer which implies that they struggle to see opportunities for further value
creation in short to medium term.
·
TTS is a small position and the low liquidity makes it very difficult to sell in the open
market.
Case update details
Austrian based Palfinger bids NOK 5,6/share for all outstanding shares
Unpopular: Yes, Expectations are low among investors after years of mismanagement and lack
of focus.
Under researched: Yes, No coverage
Undervalued: Yes, Palfinger willing to pay NOK 5,6/share .
17
Shire Pharmaceutical (SHP LN) 4300p
History and description of business
Ireland based specialty pharmaceutical business established in 1986. Specialize in rare disease treatment and drugs
that require long term use. Entrepreneurial culture.
Sales geo North America 73%, Rest of world 27%
Sales treatment areas: Hyperactivity 34%, generic malfunction like hemophilia 40%, gastrointestinal 15%, other 11%
Case identifiedd in search process after stock price fall for pharmaceutical sector
22.000 employees in 100 countries
Business model and rationale for investment
Pharmaceutical business wrapper in the rare disease and generic treatment area. Bought Baxalta (hemophilia drugs)
in June 2016 resulting in revenues going from 6bn $ to 11bn $ and net debt increasing from 1.4bn $ to 16bn $. EBITDA
4.5bn $ so reduction of leverage is high on agenda with management
Investment thesis is revenue and earnings growth driven by innovtative treatments, deeper penetration and synergies
with Baxalta acquisitio. 2020 revenues are expected to reach 17-18bn $ from estimated 11bn $ in 2016.
Gross margin has been 86% and with mid-30’ies EBITDA margin. Shareholders equity is 10bn $ and ROE around
20%
ESG: no issues identified and CSR rating is good
Triggers:
1. Approval of several phase III drugs expected later in 2016
2. Harvesteing the benefits of the Baxalta acquisition and showing its in later 2016 and 2017
3. Longer term growth in Shire’s drug specialities is high – hence the revenue
Risks
1. New drugs not meeting approval criteria – reduction of future revenue forecasts and earnings.
2. Net debt position is high vs EBITDA after Baxalta acquisition. If Shire is not able to reduce debt load it will hold the
stock back
Target price
Based on a 2019 revenue stream of 17bn $, EBITDA margin of 45%, small capex and a net debt that has been
reduced to 9bn $ and a return requirement of 6% (in line with market) then it’s a EPS of 5.50-6.00 $ times 16.5x = 95$
vs current price of 59 $ - 60% upside potential
Key figures:
Market cap
USD
NOK
53bn
425bn
Net debt (cash)
No. of shares
No. of pref
USD
16bn
899m
0
P/E 2016
P/E 2017
P/BV trailing
ROE 2014-17
Yield
EV/EBITDA 2016
Daily turnover
No of analysts
with sell/hold
Owners
USD
150m
26
4%
Blackrosk 7%, Deutsche Bank 3%,
Fidelity 2%, Legal & General 2%
www.shire.com
18
13.9x
11.6x
2.0x
20%
0.5%
9.6x
3U addition to fact sheet
Unpopular
Underanalyzed
• Business model understanding (protection, business volatility, leverage, management
quality, historical performance vs future targets and potential) everybody can see
• Relate the above to why is the business unpopular – few sell side buy
recommendations is not enough, so take more holistic view like region, sector,
management, M&A trail etc
• Position in economic cycle and or exposure to disruptive trends, where we see different
and with common swense can argue why the consensus thinking is ot right
• Our case focus and trgers vs others perception of the company
• Sell-side recommendation is in all fairness of limited value in many cases. Number of
analysts is value added
• Ownership structure – especially institutional behavior
•
Undervalued
•
•
Valuation absolute and argued vs business volatility, management quality, financial
leverage, stock liquidity ad timing of trigger
Mispriced rather than optical low valuation absolute and vs peers
Target price and date as well as downside risk and arguments
*
19
In USD
The largest companies in SKAGEN Vekst
Samsung Electronics, the Korean electronics group, has enjoyed very solid growth in consumer
electronics, especially smartphones. Pole position in global semiconductor market. Cash
generation is very strong and the company has historically wisely invested in new business areas
– solar power and healthcare are on the roadmap for the future.
Continental AG produces tyres for cars and trucks and makes auto technology such as power
trains, safety systems and automated drive systems. The replacement cycle for tyres is
becoming stretched in some markets, so near-term earnings look promising. In the longer term
Continental’s pole position in global auto technology provides a good backdrop for substantial
growth.
Carlsberg A/S is an international brewing company. The company produces branded beers
and regional brands. Carlsberg makes most of its beer outside of Denmark and it is sold in
markets around the world. The company also markets and produces soft drinks, water and
wine.
Norsk Hydro ASA is a Norwegian aluminium and renewable energy company headquartered in
Oslo. Norsk Hydro is one of the largest aluminium companies worldwide. It has operations in
some 50 countries around the world and is active on all continents. The Norwegian state holds a
34.3% ownership interest in the company, which employs approximately 13,000 people.
20
The largest companies in SKAGEN Vekst (continued)
Citigroup Inc. or Citi is an American multinational banking and financial services corporation
headquartered in Manhattan, New York City. Citigroup was formed from one of the world's largest
mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers
Group in October 1998.
Norwegian Air Shuttle is the leading Nordic-based low cost airline, which in 2015 flew over 26m
passengers. The fleet of airliners and the route network are growing rapidly proving the concept
of Norwegian local low cost airline, to Nordic, to European and to Global reach.
Ericsson is a Swedish multi-national corporation that provides communication technology and
services. Founded in 1876 and has today a revenue of 227bn SEK. Ericsson had 33% market
share in the 2G/3G/4G mobile network infrastructure market in 2014.
Koninklijke Philips N.V. is a Dutch diversified technology company headquartered in Amsterdam
with primary divisions focused in the areas of electronics, healthcare and lighting. In May 2016 it
listed their lighting division as a separate company.
ABB (ASEA Brown Boveri) is a Swedish-Swiss multinational corporation headquartered in Zurich,
Switzerland, operating mainly in robotics and the power and automation technology areas. ABB
is one of the largest engineering companies as well as one of the largest conglomerates in the
world. ABB has operations in around 100 countries, with approximately 135,000 employees in
December 2015 and reported global revenue of USD 35.5 billion for 2015.
21
For mer informasjon, vennligst se:
Siste Markedsrapport
Informasjon om SKAGEN Vekst på våre nettsider
Historisk avkastning er ingen garanti for framtidig avkastning. Framtidig avkastning vil blant annet avhenge av
markedsutviklingen, forvalters dyktighet, fondets risiko, samt kostnader ved kjøp og forvaltning. Avkastningen kan
bli negativ som følge av kurstap.
SKAGEN søker etter beste evne å sikre at all informasjon gitt i denne rapporten er korrekt, men tar forbehold for
eventuelle feil og utelatelser. Uttalelsene i rapporten reflekterer porteføljeforvalternes syn på gitt tidspunkt, og dette
synet kan bli endret uten varsel. Rapporten skal ikke forstås som et tilbud eller en anbefaling om kjøp eller salg av
finansielle instrumenter. SKAGEN påtar seg intet ansvar for direkte eller indirekte tap eller utgifter som skyldes bruk
eller forståelse av rapporten. Ansatte i SKAGEN AS kan være eiere av verdipapirer utstedt av selskaper som er
omtalt enten i denne rapporten eller inngår i fondets portefølje.