European Capital Partners - Time for some gardening Discover this fund | European Capital Partners
Asset management and fund structuring boutique

Time for some gardening

Oct 26, 2022

With all what is going on in the world, both on the geopolitical and financial fronts, one of the only remaining havens of peace you may find is your garden. Husqvarna is the global market leader in robotic lawn mowers, with a strong position in chainsaws and other hand-held petrol-powered forestry & garden products. It also owns the well-known Gardena premium brand. Less consumer demand at the end of pandemic, supply-chain issues and a massive retailer destocking at Gardena explain a 56% share price drop this year alone for Husqvarna. We view these operating issues as temporary as the underlying long term business dynamics are intact for a company with a leading position in the fast growing robotic lawn movers segment. The company scores better than the average European company in our proprietary quality-value framework. Valuation is depressed at 11 times earnings, a bargain for a growing business with a normalized ROE above 15%. Time to do some gardening ( with the usual disclaimer that we are long the stock in our portfolios ).

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