I found this “trash bin” company (undervalued gem) last winter on a peer comparison list in one of Inderes’ company analyses. It’s worth glancing at those lists, as you might make surprising discoveries there. I haven’t found any discussions about the company, even though the stock has enormous potential due to the combination of low valuation and significant business potential. The company is also interesting from a Finnish perspective, as it has significant operations in Finland within its own niche segments (Alfen Elkamo Oy Ab).
The company has three interesting business units related to electrification and improving security of supply: Energy Storage Systems, EV Charging Solutions, and Smart Grid Solutions. Specifically, EV Charging Solutions has been struggling for a couple of years, which has pushed earnings and the share price down nicely. There is an interesting nuance regarding EV charging solutions, which in the company’s vision could become part of the balancing power for future electrical infrastructure. This vision could enable pricing power and competitive advantages, at least against cheap Chinese imports, as European solutions should naturally be favored in power infrastructure critical to the security of supply. Focusing on cooperation with utility companies and developing bidirectional charging seems like a good strategy and could enable profitable business in EV charging solutions in the future. In the other two business units, the outlook is excellent, as significant growth in electrical infrastructure investments is expected across Europe in the coming years.
The company updated its strategy and changed its CEO last year. The earnings turnaround already happened last year but seems to be strengthening this year. The bottom has already been seen and the best buying opportunity may have passed, but the stock still has enormous potential, and in light of better information, it is only right to pay somewhat more for the company. It’s hard to say what the share price should be right now; perhaps the current price is fairly neutral, and below €10 we were clearly in undervalued territory. The stock has been very volatile historically, so a word of caution: a recoil is always possible after a rally like this.