When it comes to its activism strategy, Cevian Capital is known for its skillful approach to the board of the companies it invests in – it has never had to win a proxy battle in order to get a board seat. And with its professionals being a part of the nine boards in six countries at the moment, we can just conclude that Cevian Capital has perfectly mastered the art of sophisticated and productive activism. They really put their efforts into helping companies become better and stronger, with one of the best examples being Danske Bank, on whose board was Lars Förberg for three consistent years.
Since the fund owns a concentrated portfolio and prefers to hold its stakes for several years, it can only build a few new positions every year. Let’s take a look at its most recent top stock picks, and the only two in its portfolio that are trading on NYSE.
In March 2018, Cevian Capital initiated a long position in Autoliv Inc. (NYSE:ALV), the world’s number 1 automotive safety company that supplies the best car manufacturers in the world. The company is based in Sweden and it trades both on the New York Stock Exchange and on the OMX Stockholm Stock Exchange. According to the company’s promo, every year its products help save more than 30,000 lives and prevent more than 300,000 severe accidents. At the end of the third quarter, Cevian Capital’s position in Autoliv counted 5.72 million shares, with a value of $496.13 million. In its recent financial report for Q3 2018, the company disclosed a gross profit of $386.1 million compared to $394.9 million for the same period in 2017, and operating income of $192.5 million versus $167.2 million in Q3 2017. Its adjusted earnings per share amounted to $1.35 compared to $1.64 in the third quarter of the previous year. Year-to-date, Autoilv’s stock has lost 21.75% and it is currently trading at $72.06.
The second Cevian Capital’s top stock pick just continues the story, as it is the company which is the spin-off of Autoliv’s electronic segment. The new company, Veoneer Inc (NYSE:VNE), which has its main focus on Advanced Driving Assistance Systems and Automated Driving, started trading on NYSE and Nasdaq Stockholm at the middle of the year. On September 30, 2018, Cevian Capital disclosed a stake in Veoneer that was worth $315.20 million, and counted 5.72 million shares. Since the company started trading at the beginning of July until now, its stock price has lost 41.71% and, at the moment of writing, it is trading at $24.86. For the the third quarter 2018, Veoneer reported net sales of $526 million compared to $567 million in the same quarter of 2017, and gross profit of $99 million, versus $109 million in Q3 of 2017, and operating loss of $58 million, compared to operating loss of $16 million in the same period in 2017.
Disclosure: None.
This article was originally published at Insider Monkey.
