Lind Research #3

This week, we do something different: We dig deeper into Origo’s core positions to look for opportunities. Enjoy!

Origo Funds Capital Inflow, Opportunity

Last week, it was announced that Origo, one of the top hedge fund managers in the Nordics, had received the mandate to manage money from the Norwegian Bank Investment Management (NBIM), Norway's wealth fund.

First, this is a considerable achievement for Origo, and we want to congratulate them. Congratulations!

But now when the courtesy is over, what opportunity can this create for an outside investor?

We do not know how much the NBIM will invest into the Origos funds. However, we know that Origo has stated they plan to grow their team further. So it’s likely that the mandate will lead to a pretty strong influx of capital to the firm.

With an inflow of capital in the coming months, we find it likely that Origo will add on to their high conviction positions. Origo does not operate like the typical mutual fund that just overweight/underweights stocks based on an index constitution. They focus on absolute returns and care little about index weights. Many of Origo’s core positions are in relatively small companies, if they add on to their position, it might create some buying pressure and price increases.

Origo is also arguably one of the prime investors in small caps in the Nordics, so it’s well worth checking on their core positions for a buying opportunity.

Origo’s “buying” list

We have analyzed Origo's monthly reports for the past twelve months. The reports are also a great read, and the February report can be found here. We have looked at recent positions they have initiated and which companies they talk about positively.

The list below is not a complete list of Orgios holdings but rather companies where they have expressed that they find the valuation attractive or generally positive.

In our view, CARA, FREETR, and NEWAB look the most interesting to analyze further.

BioGaia (BIOGB)

Industry: Health & Consumer
EV: SEK 10.6bn

Price (SEK): 117
52W Low/High: 95 / 134

*Estimates from Koyfin

Notes

Origo recently expanded its investment in BioGaia because of its strong revenue growth, high operating margins, and increasing international sales. They emphasize their probiotic product line as a key growth driver, with rising demand, especially through Amazon in the U.S.

Our view

Origo likely sees additional potential for revaluation, especially considering its historically low valuation compared to previous years. Based on their positive remarks, they might think consensus growth estimates are too low.

Elekta (EKTAB)

Industry: MedTech
EV: SEK 27.4bn

Price (SEK): 58
52W Low/High: 57 / 89

*Estimates from Koyfin

Notes

Despite its recent underperformance, Origo remains optimistic about Elekta, pointing to its new product portfolio (EVO and Elekta One), strong global market position, and a 21% increase in order intake. They argue that investor sentiment is overly pessimistic and anticipate a margin recovery.

Our view

Origo is likely expecting to see enhanced sentiment as operational improvements and margin expansion take shape, leading to higher valuation multiples. Market consensus seems to anticipate improved margins and growth in 2026; however, Origo might expect these changes to happen even sooner.

Carasent (CARA)

Industry: Healthcare IT
EV: SEK 1.4bn

Price (SEK): 22
52W Low/High: 10 / 25

Notes

Origo has held a significant position in Carasent, highlighting its premier software solutions for digital healthcare and continuous operational enhancements.

Our view

We believe CARA is a growth-driven value case with improving margins and strong long-term demand. The company is transitioning from acquisition-heavy years to a greater focus on sustainable growth and profits, guided by a new management team.

Most margin improvements are projected for 2026, although they could arrive sooner. In the recent Q4’24 report, the CEO noted that they “saw a little softness in H1 2025,” which may dampen the near-term trigger for revaluation. Overall, Carasent appears to be a very interesting case to explore further, with a horizon of 12-24 months.

RaySearch Laboratories (RAYB)

Industry: MedTech
EV: SEK 8.0bn

Price (SEK): 235
52W Low/High: 103 / 275

*Estimates from Koyfin

Notes

RaySearch has emerged as a significant success within Origo’s portfolio, showcasing notable revenue growth and enhanced cost control. They emphasize its scalable business model and the increasing demand from hospitals moving towards more advanced radiation therapy software.

Our view

Origo continues to see strong upside potential as the company transitions into a higher-margin phase. The market consensus, just like Origo seems to project further margin expansion.

We lack sufficient insight into the company to form our own view, but if profit growth materializes, the valuation appears relatively fair at 19x EBIT for 2026. For there to be more upside, the company will likely need to outperform current market expectations, which remain quite high.

Further margin and growth potential analysis is necessary, as they are central to this case's return potential.

New Wave Group (NEWAB)

Industry: Consumer Goods
EV: SEK 15.8bn

Price (SEK): 105
52W Low/High: 94 / 130

*Estimates from Koyfin

Notes

Origo sees significant upside in New Wave due to its strong brand portfolio and underestimated distribution capabilities. They believe the market has not yet priced in its operational leverage. Origo seems to continue increasing their position and is likely to keep investing as the valuation remains attractive.

Our view

Central to the return potential in New Wave is judging when and if the bounce back in the Swedish market occurs, along with the future potential and success in North America. In Q4, the management highlighted that they expect to see a strong second half of 2025 driven by market expansion and improved operating leverage due to investments. In his CEO letter, Torsten Jansson highlights multiple growth avenues for 2025 and beyond:

Overall, we don't consider the current market valuation to be pricey, even if the company delivers on the market consensus estimates. A valuation of around 10X EBIT for a company emerging from a relatively weak market seems appealing. We believe New Wave deserves a closer examination.

Freetrailer (FREETR)

Industry: Tech & Consumer Sharing Economy
EV: DKK 0.8bn

Price (DKK): 85
52W Low/High: 34 / 89

*No estimates

Notes

Freetrailer has been one of the strongest contributors to Origo’s performance in 2025. The company is expanding rapidly, with high revenue growth and record trailer rentals. Orgio seems optimistic and believes there is further upside, especially given its first-mover advantage in a growing market.

Our view

The key here is to evaluate the revenue runway and how long the company can maintain its growth. Overall, it's clear that the margins are expanding alongside higher sales, indicating scalability; however, how high can they go?

We don't know for now, but let’s assume the company can sustain a 20% CAGR over the next three years and achieve a 25% EBIT margin. This would result in an EBIT of DKK 46 million by the end of 2027. If trading is around 20x EBIT at that time, it would lead to an Enterprise Value of DKK 920 million, compared to the current EV of DKK 725 million, suggesting an IRR of approximately 9%. For us, that seems a bit too low for a clear margin of safety. Of course, if one assumes a 25x EBIT in 2027, that presents an entirely different scenario.

Thus, one must delve deeper into the sustainability of growth and the potential for margin expansion. We believe Freetrailer warrants a closer look to understand the key value drivers in the coming years.

SOBI (SOBI)

Industry: Biotech
EV: SEK 118bn

Price (SEK): 297
52W Low/High: 251 / 354

*Estimates from Koyfin

Notes

Origo has been long-term bullish on SOBI, citing its high-growth pharmaceutical pipeline and undervalued stock following a failed takeover bid in 2021. Recent earnings have surprised to the upside. We believe Origo continues to see upside potential, particularly as new drug launches gain traction.

Our view

EBIT growth is expected to be 20-25% in the coming years, and the valuation seems relatively fair given those expectations. Our view is that SOBI seems more like a GARP case than a deep value case, and one should likely not expect sentiment shift and higher valuation multiples, but instead see an IRR inline or slightly below the growth of earnings the coming years.