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In this article I will concentrate on two new stocks I have not covered before on The Armchair Trader, but look to be very interesting in the medium and long-term especially. Both are close to All Time Highs and both are growth companies. Neither are for the faint hearted.

QTCOM, QT GROUP OYJ, (FI4000198031) – Nasdaq Nordic/Helsinki

Qt Group is expensive, but for a reason!

I have not seen a Finnish stock almost double in a month at this market cap size of over 1 billion euros – maybe ever. The Qt group (www.Qt.io) – a software maker – has already had the best year in its brief public history since 2016. Spun off by Digia Oyj and listed May 2nd 2016 (they are both ex-Nokia companies) and quietly trading for years until December 31st, 2019 at 21 euros. Its 52-week range is at an ATH based on a range of €95.4 – 15.6. The stock closed at €94.4 on February 22nd.

Q4 2020 Report exceeded all expectations after positive warning

The Qt Group was also able to guide full 2021 results with 25-35% topline/bottom line growth. All five Finnish analysts raised their targets to around €95 AGAIN after the fact. The Inderes CEO and Head Analyst Mikael Rautanen was so “bullish” on the company that he had problems keeping calm. Maybe the best Finnish growth company of his career EVER.

Why? What happened in Q4/2020?

Qt Group launched a new version 6.0 of its software development platform to Qt Group developers in October 2020. The license sales will force the developers to activate version 6.0 in a few years, which means 30% topline/bottom line growth for more than a few years to come. The growth is almost 90% guaranteed with this upgrade.

What is Qt for us non-IT developers – it is like MS Office for developers – you use Qt to create almost everything you code!

Qt Group (Nasdaq Helsinki: QTCOM) is a global software company with a strong presence in more than 70 industries and is the leading independent technology behind millions of devices and applications. Major global companies and developers use Qt worldwide, and the technology enables its customers to deliver exceptional user experiences and advance their digital transformation initiatives. Qt achieves this through its cross-platform software framework for the development of apps and devices, under both commercial and open source licenses.

Approximately one million developers use qt technology worldwide. Qt enables a single software code across all operating systems, platforms and screen types, from desktops and embedded systems to business-critical applications, in-vehicle systems, wearables and mobile devices connected to the Internet of Things.

The client list is full of S&P 500 companies: Cars (Mercedes-Benz, Peugeot etc), Rockwell Automation, Sky and LG to name few. CEO Juha Varelius said many S&P 500 companies do not want to disclose that they use the Qt software.

Nordnet (ISIN: SE0015192067) – Nasdaq Nordic/Stockholm

Nordnet became public November, 2020

Nordnet (founded in Sweden in 1996) has operated in all Nordic countries except Iceland since 2009 when it bought eQ online in Finland. Since financial crisis in it has survived and listed on Stockholm NASDAQ Nordic with huge success November 2020.

Trading so far

The stock has traded between SEK 100.6 to SEK 169.5 – an All Time High. Nordnet closed Monday February 22nd, 2021 at SEK 164.2. Its market cap is 41 billion SEK, which is around 4 billion euros.

Last week February 16th Nordnet announced that it had passed 400,000 customers in the Finnish market; that is 44% of the total stock trading accounts in Finland. At the end of January, Nordnet had close to 1.3 million customers in Nordic countries.

During 2020, almost 100,000 Finnish private savers/traders joined Nordnet, which is equivalent to an annual growth of 35%. The pace has accelerated further during January-February 2021, when more than 20,000 Finnish private individuals so far started a customer relationship with Nordnet.

Market leader with Nordic private investors

The great fact about this new public company is that it is mainly used and owned by private investors of Nordnet. Nordnet the company publishes in great detail its trading account activity every month. With great details comes excellent transparency for investors. In Nordic countries in 2021 private investors are BACK. Most of these investors have never experienced the 2008 crash or dot.com boom and bust era. They are not afraid to save and invest.

In January, 7,604,400 trades were made in listed financial instruments among Nordnet’s customers in Sweden, Norway, Denmark and Finland. That corresponds to 411,000 trades per day. The number of customers at the end of January was 1,287,300, which is 65,800 more than the previous month. Net savings for the month were SEK 10.9 billion and the savings capital was SEK 594 billion. Lending amounted to SEK 20.4 billion at the end of January.

UK brokers with access to Nordic markets

We frequently get asked about how UK investors can trade Nordic stocks. While our picture is not complete, we know that Saxo Markets and eToro give access to UK individuals who want to participate in Nordic stocks. There are still competitive fees for Nordnet on trades in Nordic countries, usually at least 3-6 euros per trade, and if you use leverage even better. Saxo Markets is the only real competitor in Nordic countries, but it is not very much used in Finland or Sweden; as a Danish company it is a different story in Denmark.

Related

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Raine Lahtinen

Raine Lahtinen

Raine Lahtinen has spent over 25 years in wealth management and trading. His active investment days started when he attended University of Miami 1987-1991 majoring in International Finance and Marketing. He has experienced the highs and lows of the stock markets since the 1987 crash, Dot.com bubble 2001-2002, the 2008 financial crisis and the current record breaking rally.

Since 1995, Raine has been based in Brussels, Belgium in Continental Europe as an international financial advisor and director of investments in various UK IFA firms. He has written many popular columns about markets and investments during his professional life. His passion is finding undervalued listed stocks. As a Finnish native he specializes on Nordic and US stocks.

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