I had to start a new thread because L&T didn’t have its own yet. Last week’s negative news was expected, but now I’m a bit torn: should I buy more or cut my losses?
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Absolutely incomprehensibly poor company. Biowatti seems more like a hobby, with no competitive advantage in property maintenance etc. The cherry on top is the traditional waste management business, which the company somehow fails to grow properly despite its market leadership.
Surely there’s some price for this too, but faces need to change in the company.
How about plastic recycling, which the company seems to be investing in? Would there be potential for the company in that?
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I bought and sold with a small profit quite recently. Today’s youth use the expression IDGAF. It will definitely stay afloat, but there won’t be any big bang, it’s an investment comparable to a bank account.
T:K
This is an interesting case, the consensus target price lags at 14 euros, and the course is at 16.50. Traditionally a good dividend payer. In addition, recycling is a strong trend and probably earns sustainability points in fund selections. The defensive nature of the business means the price could develop even higher in an era of negative interest rates.
Addition: It’s worth mentioning that I sold my position, which I bought at 13.05, already at 15.50 euros, with the intention of buying back cheaper later 
. I’ve been fiddling around with it a bit since then, but now I’m on the fence about whether to buy a position before the financial statement release. It’s unlikely to be a disappointment to the market, but rather steady, reasonable performance. The company is very active on Twitter.
Financial statement slightly weaker than expected, CEO does not consider performance satisfactory. Cash flow, however, is strong, dividend remains unchanged at 0.92 e (approx. 5.75% at current exchange rate, but payout ratio slightly over 100%). Profit improvement is expected for the current year. Extremely difficult to estimate stock reaction due to lack of proper consensus. If it drops, I’ll buy more.
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This is the same weak performance it has been for the entire last decade. So, nothing surprising in the result.
Perhaps if the company manages to slightly improve its result, say, to around one euro EPS, then this isn’t super expensive. However, management’s track record for profitable growth is really weak.
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I bought a small slice for the first time now, after the Q4 results. I pretty much agree with previous writers. The company’s track record is not good. However, the industry is interesting, defensive, and megatrends like recycling, climate change, and sustainability should bring tailwinds. I haven’t had time to delve deeper into management’s statements yet. Hopefully, they are not prone to making excuses.
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The financial statement mentioned in consecutive sentences the sale of renovation construction (and the resulting decrease in net sales) and the spin-off of property services (either starting or continuing). The idea might be to eventually separate/sell the property services as well and focus on whatever the future business garbage is.
That move would raise the price 
In today’s Arvopaperi magazine, Timo Harakka’s shareholdings are revealed. He praises Lassila&Tikanoja as follows: “On the one hand, an investor’s job is to support Finnish business. In recent years, I haven’t thought about returns, but I’ve wanted to support some activity with my own pennies. For example, Lassila&Tikanoja has done good work in recycling, and as Minister of Labor, I got to see how they have employed many immigrants, partially disabled people, and elderly workers. It’s nice to be involved as an owner in something like that.”
I mainly shared this because the news flow on Lassila&Tikanoja is quite scarce 
Foreign ownership in nominee accounts was only 12.15% at the end of January, by the way. I personally consider this a stabilizing factor in the share price; foreigners certainly bring growth, but also a sharp decline when they disappear from the periphery markets.
I’ve been reading up a bit on Lassila & Tikanoja’s (L&T) financial statements and browsing their investor pages. I proceeded by the book, only checking the per-share valuation multiples last and not focusing much at all on staring at the stock price.
In the last quarter, the results of all business segments declined from the comparison period, but real estate services in Finland slumped the most. In principle, Finnish real estate services are performing the weakest of these. The company could be interesting, especially as I see potential in their environmental services, but I’d first want to see the Finnish real estate services turn in a better direction.
I consider the industry to be quite defensive. Recycling and environmental care are constantly increasing in companies and society, and L&T is helping with this. Recycling must also happen during an economic downturn. The company mentions factors like the cooling construction industry as risks, but I personally also see the risk of compromising responsibility for profitability by secretly dumping plastic waste into the Baltic Sea or forests and then getting caught. Okay, maybe I got a bit carried away, but anything can come to light in those responsibility matters. I know that plastic waste has even been sold (!) abroad, and plastic recycling is unfortunately still in its infancy. But the direction is right.
The dividend is the same as in the past few years, 0.92 euros, and EPS is 0.9 euros. I don’t see the dividend as very sustainable at the moment, especially at this rate.
The company’s goal is to grow 5% annually. This is, of course, just a goal. The industries grow 1-2% per year, so the company is, by all accounts, a slow-growth company if things go well. Additionally, the company focuses a lot on customer and employee satisfaction.
Then I looked at the multiples. P/E of 18 on realized figures and a dividend yield of just over 6%. In the short term, I see nothing but returns consisting of dividends, which don’t have much room for growth at the moment. The expected return seems quite weak for me, and there’s also a bit too much risk for my taste, but I’ll have to keep an eye on the company from the sidelines…
Equity ratio 35% and net gearing 66%
Lassila&Tikanoja: Kiinteistöpalvelut Suomi jarruttaa kasvua | Sijoitustieto.fi Here’s a short article about the company. It’s not super new but probably still valid.
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Here, Tuomas Mäkipeska, the director of operations for the problem child, Suomi Kiinteistöpalvelut (Finnish Property Services), talks about the development at last November’s Capital Markets Day. The problems have been identified and work is being done to address them. At least the customer and employee experience has already improved somewhat: https://www.youtube.com/watch?v=BJvuo8hRL1k&list=PLkrsmFBeeCD_opql4AZbD0RR6nGlNEH5T&index=6
Simply put, all property service operations should be divested immediately. Such property maintenance is completely bulk, regardless of the scale of operations. I don’t know if the management imagines this having any synergies with the environmental business, but it doesn’t have any. At best, for example, in a housing company, waste management is put out to tender, and the garbage is collected once or twice a week. Property maintenance can then be done by someone else.
In environmental business and industrial services, there are certainly more synergies. There will be other waste besides plastic and cardboard, which already requires a bit more from the business.
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Let’s put it here too, the company did not disappoint, the dividend of 0.92 was blessed in the afternoon. 97 brave souls attended the general meeting, with only a part of the board and management team present according to the contingency plan. They had been prepared for the Corona for a month, the biggest risk naturally being the illness of personnel. Other direct and indirect effects are of course the quietening of industry and construction, which would eat into profits. “Business as usual” pretty much. Slowly but surely, success will come , although the ERP system may still cause costs in Q1 for real estate services in Finland. I believe I ate salmon pie as a real dividend.
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Wasn’t it cod? 
LT is a nice cash flow case and a more stable business, but for a stable business, its results were pretty weak last year.
You probably have more in-depth knowledge of the company. Could you share your thoughts before and after, as well as on E. Erp. Hautaniemi? 
Is it a coincidence that we’re dipping after the man’s arrival?
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I hope I would have recognized cod, at least 
It’s difficult to draw conclusions from Eero’s little over a year as CEO, as he also sat on L/T’s board before being appointed CEO. Suomi Kiinteistöpalvelut (Finnish Property Services) is the pain point because the contract portfolio has shrunk, but I understand that customer satisfaction, at least, is already growing. The problems with the enterprise resource planning (ERP) system sound ominous, especially knowing Eero’s Oriola history. However, I understood that the situation would be in order during Q1. I also trust Chairman Bergholm (who was also CEO 20 years ago); he will blow the whistle if the performance is not satisfactory.
All in all, I currently own “Tikanpojat” with a fairly safe mind; the ownership base will continue to ensure an owner-friendly approach to profit distribution.
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The dividend then arrived in my Nordnet account today, something positive amidst this crisis. The share price (+7.87) showed some signs of recovery yesterday, perhaps people have noticed that Corona won’t bring this company down. Employees may, of course, have to go on sick leave and into quarantine.
I had a feeling that the coronavirus could benefit Lassila&Tikanoja, at least in this sense: Siivousfirma nujertaa koronaa desinfiointipanoksilla – asiantuntijan mukaan rättikin riittää viruksen karkottamiseen | Yle
L&T is taking quite a hit from corona, and especially corporate cleanings have decreased. Also, on the waste management side, all schools and universities dropped out of the game. On the other hand, small properties, terraced houses, and apartment buildings would presumably get more/more frequent gigs, because people are working remotely. There’s a bit of L&T in my wife’s portfolio, and the company’s business is indeed running even during corona, just not quite as urgently.
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