The Nordic Investor team wishes all of our readers a Happy New Year!
As we enter 2015, we decided to put together a short compilation of our top-picks going into the new year:
- TrustBuddy: P2P lending provider listed in Sweden. Following the recent IPOs of US alternative finance providers Lending Club and OnDeck Capital, shares of TrustBuddy look clearly undervalued compared to peers.
- CMGE: The best pick in mobile gaming for investors. China’s number one developer and publisher of mobile games enjoys outstanding growth and steadily improving margins. In the recent Q3 2014, the company reported total net revenue of USD 58.3m, an increase of 30.2% from the previous quarter. Y-o-y the revenue growth was no less than 264%. CMGE’s operating margin was 20.4%, an expansion from 15.9% from the previous quarter. Our regular readers know that we have always been a fan of the mobile gaming market. We feel very comfortable to have replaced our long time favourite G5 Entertainment with CMGE. CMGE’s shares are listed in the US and trade a clear discount to sector peers.
- Nexam Chemical: The company develops, manufactures and sells an entirely new type of heat-activated crosslinkers for the broader plastics market. Its technology and products make it possible to significantly improve the properties and performance of most types of plastics in a cost-effective manner and with retained production technology. In our opinion, Nexam Chemical seems to have the potential to become a multibagger.
- VA Automotive: Recently IPOed in Sweden. In its current structure founded in 2008, VA Automotive is a company group that operates mainly within the vehicle industry (around 95% of group sales are related to the automotive sector). The group, which is a result of intensive M&A in recent years, focuses on three strategically important business areas: tool engineering, automation and components/systems solutions. VA Automotive operates in three locations in Sweden and two in China. In our opinion, a fair share price level at current conditions should be around SEK 10, implying an upside of more than 50% compared with the IPO price. The VA Automotive stock offers a great amount of fantasy. The Swedish capital goods sector is supported by a weakening SEK, which makes it even more competitive on the international arena and the growth drivers for the automotive industry seems in place for the years to come.
Have a prosperous 2015!