Investor, the renowned investor, outperformed the stock market in 2024 with an impressive total return of 27%, compared to the benchmark index SIXRX, which only yielded 9%. However, towards the end of 2024, the adjusted net asset value decreased by 2% to 970 billion SEK.
The stock initially faced a decline of nearly 3% at lunchtime but managed to recover to -0.7%. This shift was attributed to the fact that the stock was trading without any discount to its net asset value, as noted by Citi in a commentary. CEO Christian Cederholm emphasized that this was primarily driven by the listed portion of the company.
Despite the strong performance throughout the year, Investor did not execute any major transactions in the final quarter, despite having a robust balance sheet. The company’s leverage ratio currently stands at a mere 1.2%, well within the target range of 0-10%.
Cederholm highlighted the continuous scouting and acquisition efforts that are integral to Investor’s strategy, acknowledging that deal closures can vary from quarter to quarter. He expressed confidence in managing a potential scenario of an overly strong balance sheet, emphasizing that the board’s comfort with increasing dividends was partially due to this financial strength.
The board has proposed an 8% increase in dividends, continuing the trend of annual dividend growth averaging 9% over the past decade. When asked about the impact of economic conditions on the balance sheet strength, Cederholm emphasized that while cash reserves could provide a buffer in uncertain times, the current balance sheet position was deemed appropriate.
Husqvarna, a constituent of Investor’s listed portfolio, experienced the weakest performance in the final quarter of the year, with its stock declining by 18%. Cederholm acknowledged the challenges faced by the company in a volatile market but stressed the importance of proactive measures such as cost-saving initiatives and product launches to address these issues.
In his CEO statement, Cederholm underscored the global economic uncertainty, citing concerns over geopolitical tensions and the recent inauguration of Donald Trump as the President of the United States. While acknowledging the potential impact of policy changes, particularly in trade relations, he reiterated Investor’s commitment to sustainability and green initiatives.
The unlisted portfolio managed by Patricia Industries emerged as a standout performer in 2024, with a 30% increase in value. Notably, Mölnlycke, a wound care company, and Laborie, a medical technology firm, contributed significantly to this growth through strategic expansions and innovative product offerings.
When asked about the sustainability of Laborie’s growth trajectory, Cederholm highlighted the positive performance across various product lines, particularly emphasizing the success of new product launches. He remained optimistic about the company’s future prospects, despite the challenges of maintaining growth rates in established markets.
Overall, Investor’s strategic focus on long-term value creation, prudent financial management, and proactive portfolio management strategies position the company well to navigate the evolving economic landscape and capitalize on emerging opportunities in the market.