With €109 million in sales during pandemic in 2020, sauna marker Harvia is a strong hold/add in these levels. Harvia’s stock closed at 54.9 on Monday December 13th, 2021. Harvia’s All Time High is 64.1 (52w 20.5 – 64.1).
I expect 2022 will be great for the sauna maker too – driven especially by Harvia’s growing USA business and increased production facilities in the USA and Europe. I am buying now and using a stop at 46.
More M&A activity is coming soon – Japan partnership established
Just last week Harvia bought the full amount of authorised in a share buyback at average of €57,23. CEO Tapio Pajuharju hinted in a Q3 Q&A session with investors that the next M&A target for his company is an infrared sauna company. These saunas are highly profitable and very popular, especially in the USA and Asia. Japan is also going to be a great market for Harvia going forward – now that it has an established long term Japanese marketer.
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Conservative analysts do not understand growth companies in Finland
With greater equity coverage this hidden gem could well exceed the conservative Finnish analysts’ previous targets pf first €13, €16, €22, €33 and now finally a €65 price target!
Harvia has only a second tier USA equity analyst house Raymond James following them, including a few very conservative Finnish ones – conservativism expressed in their long term forecasts of: 5% per annum sales growth (now 70%), 20% adjusted operating profits (now 25%), and an over 60% dividend (achieved) pay out ratio.
The dangers of investing in mid-cap companies who are publicly listed but family owned
There is increasing danger or even fear that Harvia itself might be bought out from the Finnish stock exchange. This is especially likely from the US where it is growing like a “tumble weed” at rates of over 70% per year with Almost Heaven Saunas (doubling production sites) and with great partners like Home Depot and Costco. CEO Pajuharju used the term “paradise in your back yard” to desscribe the allure of owning your own sauna, and this trend looks set to continue to capture imaginations in the US and UK with the current wellness trend.