In the past week, the Nordic impact sectors had mixed results once again. The sector Power2X & Fuel Cells came out on top, while the mobility sector fell to the bottom. We take a closer look at the food and beverage sector this week. You might want to take a bite of the two fast-growing food companies with established brands on the path toward profitability. The best-performing stock delivered a 55% return the past week and the best stock of the year has surpassed 300% in YTD return.
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The Power2X & Fuel Cells became the best-performing sector in the past week with a 7% increase fueled by strong performance from Metacon ASA which rose 45%. On the other end of the spectrum, the mobility sector fell 13% – by far the worst performance of the seven of our curated sectors. It is worth noting that the mobility sector only consists of 5 stocks, and in the past week, it was dragged down by Move About Group AB falling 55%. Year-to-date all sectors continue to be down by double digits – and the worst sector being Power2X & Fuel Cells despite the last week’s performance.
The best performing stocks have generated more than 200% in return YTD and the best performing stock, servicing the fast growing biogas sector, has generated more than 300% – trading at an all time high.
Overview of the performance of each sector the past week
Top 10 best performing impact stocks of the week
In the past week, Betolar Oyj, a Finnish company converts industrial waste and by-products into building materials with low carbon dioxide emissions, was the best-performing overall stock rising 55% following a cooperation deal with Metso. Metacon AB, a developer of systems for the production of hydrogen, electricity, and heat came on the top 10 list for the second week in a row – after its MoU with the Chinese company PERIC Hydrogen Technologies for a strategic partnership in China. Finally, Aega ASA, a Norwegian solar energy producer that operates solar power parks, came third with a 39% increase following a strong earnings release.
Despite the three stocks’ solid performance, they have all had a negative stock rice return YTD of -17% to -53%. Hence, the stock market is still very alert to what is going on in the impact stocks. We believe it can be a significant basis for stock performances in 2024 for companies with businesses performing well.
The 10 best performing stocks the past week
Food & Beverage – do you dare taking a big bite?
The Food & Beverage sector includes companies focusing on new production and farming methods (Atlantic Sapphire & Ekobot) as well as sustainable consumer brands (Hubmle Group & Veg of Lund). Innovation and having strong brands are key drivers for the industry, with a constant exploration of new ways to enhance product quality and sustainability, and where customer loyalty to strong brands can pay off. Despite facing supply chain and inflationary challenges the past 2 years, some companies demonstrate resilience, contributing to the industry’s dynamism. Furthermore, the more established players in the industry with established brands typically generate strong returns on invested capital.
By investing in the newer brands, it is possible to catch the next wave of sustainable consumer brands. The sector comprises of 11 listed companies, detailed below. Year-to-date, the sector has delivered a return of -42% with only 1 company delivering a positive return. This mirrors the global trend of the non-diary and fake meat sectors where companies have sufered major loss in share price, like Oatly which despite a 100% share price increase, is still down 48% YTD, and some have gone into Chapter 11. This development comes after the too positive expectations for growth which the companies just could not match. Further, cash strapped companies, which many of the Nordic companies are, have generally had negative share price performances as rights issues – if even possible – have been at significant disounts. With share prices depressed, better insights of the potential grotwh trajectories, and companies having filled up thier cash positions, it is definately a sector to have a close look at going forward.
Year-to-Date return for Food & Beverage stocks
Turning the tide: Two high-growth companies on a path toward profitability
Humble Group AB (Nordnet) is a swedish food group focusing on fast-moving consumer goods (FMCG) such as healthy candy, gum, protein bars etc. The group consists of +40 fast-growing entrepreneurial companies in branding, distribution and production of sustainable consumer products such as True Gum and Pandy. The brands are mainly relatively new and fast-growing. For the past few years, the company has been on a M&A spree, acquiring many brands. However, for the past year or so the company has focused more on effeciency to improve cash flows.
The company has a market cap. of 4.3 BNSEK with an enterprise value of around 5.7 BNSEK. For the first nine months of 2023 the company delivered revenues of 5.1 BNSEK compared to 3.2 BNSEK for the same period in 2022. The high growth has come with a price – the company had a net income of -95 MSEK in the first nine months of 2023 compared to -18 MSEK for 9M 2022. The company has deliverd a negative net income for 10 years in a row, but are on the verge of changing that in 2024. The company ended the last quarter with net debt of 1.5 BNSEK, which is somewhat concerning. Therefore, it is important for the company to improve its effeciency to deliver positive net income. The company has deliverd a negative EPS for 10 years in a row.
The Kingfish Company (Nordnet) is focused on fish farming. The company is Dutch, but is listed in Norway, and operates land-based fish farming. The advantage of land-based fish farming compared to conventional fish farming is that you can create optimal conditions for growth and health for the fish, avoiding unwanted lice that can destroy an entire production, without the use of chemicals, etc. There are also a limited number of offshore locations where it is possible to obtain a license to operate fish farming. Kingfish’s system mimics seasonal light and temperature conditions that fish experience in the wild. For example, they turn on the lights for longer, raise the water temperature, etc. so that the fish think it’s spring and spawn eggs. This way, Kingfish is not dependent on the natural seasons. In other words, the whole essence of Kingfish’s land-based fish farming is that production can be significantly optimized.
The company has a market cap. of 929 MNOK with an enterprise value of around 1.6 BNNOK. In the first half of 2023, the company delivered revenue of 11.6 MEUR compared to 8.4 MEUR in 2022, while net income came out at -4.2 MEUR compared to -2.8 MEUR. However, it is important to note that the company is in the middle of a major expansion and scale-up of production. The company has spent 90 MEURs to expand the production capacity from 1,500 tons to 3,500 tons. The first harvest in the new facilities was in September, and only 12 out of 18 new tanks are operational with all expected to be in use by the end of 2023. It takes time to expand the production and sales, but in 2025 the company expects positive cash flows.
Overview of the share price development of Humble Group and Kingfish Company the past year
Overview of all sectors year-to-date
The waste management sector, characterized by its essential and non-cyclical nature, often presents a stable investment opportunity with long-term potential, driven by increasing environmental awareness, regulatory demands, and the growing need for efficient waste disposal and recycling solutions. Year-to-date, Cambi ASA has significantly outperformed the rest of the sector with a 209% increase.
Overview of the return year-to-date for the stocks in the Waste Management sector
Energy Production & Storage
The Energy Production and Storage sector offers substantial investment opportunities, as it stands at the forefront of the transition towards renewable energy sources, driven by climate concerns and technological advancements. Year-to-date, only 3 stocks have delivered a positive return.
Overview of the return year-to-date for the stocks in the Energy Production & Storage sector
Energy Production Equipment & Services
The Energy Production Equipment & Services is providing technical equipment and machines to other energy producing companies such as Ørsted. The sector is to some extent influenced by oil and gas price fluctuations and industry trends. Year to date, BPC Instruments AB, delivering technologies and services to biogas plants, has performed the best with a 327% increase – the best performance of all the Nordic Impact stocks, and is trading at an all time high.
Overview of the return year-to-date for the stocks in the Energy Production Equipment & Services sector
Power2X & Fuel Cells
The Power-to-X and Fuel Cells sector offers exciting investment opportunities in the evolving landscape of clean and sustainable energy technologies, but investors should also be mindful of the evolving regulatory and competitive landscape in this rapidly advancing field. Refuels NV remains only stock year-to-date with a positive return.
Overview of the return year-to-date for the stocks in the Power2X & Fuel Cells sector
Food & Beverages
The food and beverages sector is heavily driven by consumer demand and having strong brands is a major advantage. Investors should focus on considering factors such as changing consumer preferences, health and sustainability trends, and global supply chain dynamics to identify promising opportunities. Nordic Aqua Partners AS within the fish industry has delivered a return of 25%.
Overview of the return year-to-date for the stocks in the Food & Beverages sector
CO2 & Carbon Capture
The CO2 and Carbon Capture sector presents compelling investment opportunities for companies involved in capturing and removing carbon dioxide from the atmosphere. It is a small sector consisting of only 6 stocks, with Photocat A/S as the best performing year-to-date.
Overview of the return year-to-date for the stocks in the CO2 & Carbon Capture sector
The mobility sector includes among others ride-sharing platforms and the development of electric vehicles with the purpose of lowering emissions and costs for consumers while increasing flexibility. Mobility is the smallest sector we track with totalling 5 stocks. None of the companies have delivered a positive return year-to-date.
Overview of the return year-to-date for the stocks in the Mobility sector