Positive return from shares
“It is very pleasing to report that we have produced a positive return in absolute terms. In addition, for four of the five years we achieved the target set for us, with 2010 being the only exception. What this means is that we achieved a better return than the outcome for the market as a whole, calculated on the basis of a weighted Nordic index”, explains Alexander Miller, Director - Ferd Invest.
For the five years to the end of October 2011, the business area produced a total return of 12%. The best performing Norwegian-registered fund with a Nordic portfolio reported a fall in value of 5% over this period. Moreover, all the Nordic stock markets fell over this period, with an average loss of 17.6%. In addition, Ferd Invest also performed well over the last two months of 2011, and closed the year with a performance in line with the benchmark index.
Faithful to the strategy
“With the exception of 2008 when markets were very turbulent, we have been able to stick to our strategy throughout the five-year period. This means that we have been stock pickers, looking for companies with high levels of innovation, good products that target markets with growth potential and, last but not least, highly competent management. I believe that, over the longer term, this strategy gives better results than trying to anticipate general market trends”, says Alexander Miller. He goes on to point out that it is nonetheless important to appreciate that investing in individual companies is an area with many unforeseeable factors, and that neither Ferd Invest nor anyone else can be successful every time.
“However, the investments that did not go well were generally on a relatively modest scale, while the big investment decisions have gone well. This has allowed us to report a decent overall result”, comments Alexander Miller.
Success with a name from the past
Two of the companies in which Ferd Invest has invested over recent years have made particularly important contributions to the overall result. The first of these is Axis Communications, a Swedish IT company that specialises in intelligent digital surveillance systems, and the second is the Norwegian-based company Tomra – which most people recognise for its reverse vending machines that collect bottles and cans.
“While this is a profitable business area with sound growth, the area in which Tomra has really strong potential operates under the name TiTech and is a world leader for automated waste sorting. As it happens, TiTech was originally a company launched by Elopak, which Ferd subsequently took on and developed before selling it to Tomra in 2004”, explains Alexander Miller.