5D·

Scandinavia tip?

Since our @Raketentoni was simply over the moon about my pick, I dug out another one today. What do you think of $SECT B (-0.55%) ?

I find the business field exciting. Like many other software stocks, it has come under a bit of pressure. But, in my opinion, unjustifiably so.

4 Comments

Raketentoni@Raketentoni

You've really dug up a genuine Scandinavian quality compounder! Sectra is absolutely legendary in Sweden and a real heavyweight. But before my AI assistant "Mr. Prompt" goes into raptures here, you know what has become our top priority: The chart check always comes before the formula!
We don't go blindly into falling knives, so we've taken a close look at the history:

📉 1. the chart and price check (The mandatory task!)
You said it yourself: The share has "gone under the wheels". And how! From its all-time high of just over SEK 377 in the summer of 2025, Sectra plummeted mercilessly to around SEK 173 in February 2026. A brutal drop of over 50%!

However, the share has staged a strong rebound in recent weeks and is currently back at around SEK 220 (approx. EUR 19.10). The falling knife is therefore stuck in the ground and the share is currently trying to build a strong base.
Let's take a look at whether this crash was really "unjustified", as you suspect, or whether the bare figures prove it:

🏥 2. What are they actually doing?
Sectra is a champion in a highly profitable, crisis-proof niche: they build IT systems for medical imaging (X-ray, MRI, etc. - so-called PACS systems) for hospitals worldwide. They also have an extremely popular cybersecurity division for governments and authorities. The moat is massive: customer satisfaction has been the highest in the entire industry for 13 years in a row ("Best in KLAS" award).

📊 3. the bare key figures (as at the end of March 2026)
Current share price: ~ SEK 220
Market capitalization: approx. 40 billion SEK
P/E ratio (price/earnings ratio): ~ 70 (Yes, you read that right. Still extremely expensive despite halving!)
Dividend yield: ~ 0.95

🔬 4. the "Mr. Prompt" formula check
Sectra is currently undergoing a massive transformation. They are switching their business model from one-off software licenses to pure cloud subscriptions (SaaS / Sectra One Cloud). This is putting pressure on balance sheet growth in the short term, but will ensure bubbling, recurring cash flows in the long term.
The core quality formula (sales growth + operating margin = score):
Sales growth is currently at a solid 8 to 9% due to the cloud conversion described above (with recurring sales exploding by over 20%!). The operating margin (EBIT) has been slightly dampened by the changeover, but is still at a strong 16 to 18 %.
Result: 9 + 17 = Score 26!
Conclusion: Our rule of thumb (> 25 = very good) is broken here despite the internal transformation. This is absolute quality software.
The hard exclusion rule: turnover continues to grow, margin is miles above the 5% dead zone, no castle in the air story, but tough government and hospital contracts. Filter passed with flying colors.

⚖️ 5. Future prospects: Was the crash unjustified?
A little reality check: the crash was pure mathematics and absolutely justified! Sectra was trading at the top with a P/E ratio of well over 120. If you have such an astronomical valuation and then announce that margins will fall in the short term next year due to the SaaS transition, the market will wipe you out mercilessly.
However, the future prospects are excellent thanks to the cloud focus. Just don't let yourself be blinded: Even at SEK 220, a P/E ratio of 70 for single-stage sales growth is still priced for absolute perfection.

🎯 6. special entry zones (the "Bargain Hunter's List")
Zone 1 (The Retest): ~ SEK 200. A strong psychological and technical support level in recent months.
Zone 2 (The absolute bottom): ~ SEK 175. If the overall market wobbles again and the February low is tested, Sectra is a fantastic entry point for long-term investors at this level.

Our conclusion:
A fantastic Scandinavian company with an enormous moat! However, anyone buying in here must have the patience to wait until the SaaS transformation takes full effect in 1-2 years and justifies the sporty P/E ratio. Definitely a top candidate for the watch list.

•

Chris@Multibagger

@Raketentoni OK, thanks, I'll wait a little longer. Maybe it will go down a bit in the course of the further war turbulence

••

Daniel@Daniel1212

If I only read SEK, it rings a bell in my head... The last "tip" for Scandinavia really hit the nail on the head. Thanks Intellego 🙋🏻‍♂️😅

•

Chris@Multibagger

@Daniel1212 but I hope that not all Scandinavian companies are fraudulent. But I have left Intellego in the portfolio as a cautionary example

••