Rockets within our small universe

We'll pick up a tradition from the market and highlight a rocket or two. Our universe is our top 5 investments, and our "Rocket Horizon" is until end February (when all companies have delivered Q4 results).

Crayon🏃; Rocket 1

As earlier communicated, we were spot on about Q3 and we do expect another very strong quarter in Q4. It will give comfort to the market and support a continued repricing. Price will go almost 2 x next 12 months - get on board. In addition to the underlying prospect, the recent news (a potential offer from SoftwareOne) might be a strong short-term trigger for further price increase.

Protector🥇; Rocket 2

We were spot on about Q3 on growth and combined ratio and predicted that analysts would upgrade their target prices after Q3. Guess what happened🙂 Now analysts (consensus) are up from 281 to 332 and Håkon in DNB (rated nr. 1) is at 350. We are still at 343 since we only made minor adjustments after Q3. Now we are waiting for volume update on January 1st renewal date including update on France. You should expect strong growth and a very very good Q4 result.

Webstep💫; Rocket 3

A 5-year history of strong growth but poor margins is soon over. Cost cutting activities, sale of Webstep Sweden and a new management team will gradually deliver improved margins. You saw it in Q3, and we expect another data point supporting the story in Q4. Extraordinary dividend linked to the sale of Sweden (as communicated) will also support the story. The share may not fire like a rocket in 2 months, but you never know....do you?

Morrow📈; Rocket 4

Our latest investment is Morrow. Our analysis (including target price) is not yet finished but will be available in January. We see a lot of triggers the coming months, including very strong Q4 (turnaround with new management finished) and a significant capital relief when Swedish domicile is granted (2026). The reason we are careful on "Rocket status" is simply because share price is up 45% last 3 months.

B3; TBD

After a silent period of almost 2 years, we expect to deliver our B3 analysis to the market after Q4 results (ultimo February).

Thanks a lot for an interesting journey together in 2024. We'll be back in January with a yearly update 🙂 We are targeting 20% ROE end year (just below 20% now). 20% is important since it will maximize David's bonus (with 3 fast growing kids it's always needed😅).

Disclaimer: Hvaler Invest is a significant shareholder so you cannot trust us (or perhaps you can?)

Best regards,

Sverre and David.

Lillestrøm, Norway. 17.12.24