Investing in 'safe-haven' Norway

Today Norway is the third largest exporter of natural gas, the fourth largest exporter of oil and the second largest exporter of fish in the world. The country consistently ranks high in many global rankings, such as Global Competitiveness Index, Human Development Index, etc. It’s considered financial ‘safe-haven’ due to the strength of its economy, the stable currency and the fact that it is world leading in several industries.

But are there any good investment opportunities?

Plenty. And the even better news is that the majority of those investment opportunities have not been fully discovered by investors. The rest of the article is based on research produced by the international equity research provider Prestigo Research.

Technology

Norway is a home place of one of the most dynamic and fast-growing industries – biometric fingerprints. As the level of security breaches and transaction frauds increase day by day, the need for highly secure identification and personal verification information systems is becoming extremely important, especially in the banking and finance sector (Prestigo Research).

Biometric technology appeals to many financial institutions as a near perfect solution to such security threats. Though biometric technology has gained traction in healthcare and law enforcement, its application in banking security is still in its infancy. Due to the close association of biometrics to human, physical and behavioral characteristics, such technologies pose a multitude of social, ethical and managerial challenges.

One of the world’s leaders in biometric solutions is the Norwegian company – IDEX. The company specializes in fingerprint imaging and recognition technology. IDEX’s vision is to ensure individuals a safe, secure, and user-friendly use of personal ID. It has developed the award-winning SmartFinger® technology platform based on the company’s core intellectual property, including the patented fingerprint imaging principle, sensing scheme and chip design.

Prestigo Research’s figures show that that in early 2013 IDEX’s stock was trading at 0.85 NOK ($0.13), but only three months later, it was already trading at 4.62 NOK ($0.71). In March this year the share price reached an all-time-best of 7.98 NOK ($1.23). In other words, an annual growth of 846%! Since then the price has sank again and right now the stock is trading at a level of 3.30 NOK ($0.5). However, if history tells us anything, IDEX’s stock will be on the rise again.

Manufacturing

We see similar examples in other, less-dynamic industries such as cash-handling. ATMs and coin machines have been around for a long-time and the industry has leveled off long-time ago. Nevertheless, some companies keep on growing at an ashonishingly high rates.

Prestigo Research pinpoints one such example – PSI Group. PSI is a leading manufacturer and distributor of cash handling solutions to the retail- and Security Transport (Cash in Transit) industry. Prestigo Research first initiated coverage on the company in October 2012, when the share price was at 3.55 NOK ($0.55). By the end of the year the price reached 5.39 NOK ($0.84) and continued to grow consistently until reaching it’s peak of 6.92 NOK ($1.08). The company is currently valued at 6.17 NOK ($0.95). The growth is not as impressive (72%) as in the case of IDEX (846%), but nevertheless the company had very low risk and more than desirable growth.

Conclusion

The Nordic countries have by and large avoided the worst aspects of the Eurozone crisis. It helps, of course, that  Norway is not an EU member state and that Denmark and Sweden currently do not use the euro currency. Very soon investors will recognize this opportunity and will rush to the market, but in our opinion there’s a very short window right now, when in investing in Norwegian stocks will prove to be hugely profitable.

References:

Prestigo Research (www.prestigoresearch.com)

IDEX ASA (www.idex.no)

PSI Group (www.psigroup.no)