Fortum is now a difficult part for equity investors. This is how experts assess the state of the company.
Fortum is now a difficult part for equity investors. This is how experts assess the state of the company.
Experts like On Fortum a difficult situation. Actianus portfolio manager Tommy Korpivaara believes that Fortum’s situation is confused.
“The risk is so high there that it’s hard to say whether to buy or sell.” I throw my hands in the air and say I wouldn’t touch right now,” says Korpivaara.
He points out that Fortum’s problems are in no way in the hands of management.
“They can’t do anything, but there’s a guy on the other side of the eastern border, and then there’s politicians in Germany and Finland dictating it. It’s a terribly difficult situation from an equity investor’s point of view.”
Uniper reported a huge loss
A subsidiary of Fortum Uniper reported a massive loss of 12.4 billion on Wednesday.
“The worst thing about it is that there were already so many losses at that stage,” says Korpivaara.
He found it telling that Uniper gave no guidance for the full year.
“If the price of gas goes up, the size of the loss will only deepen,” Korpivaara said, pointing to the possibility that Fortum would have to capitalize Uniper more.
“This is exactly why I would not contact Fortum now.”
The company’s situation also worries private investors Mika Heikilja.
“Fortum is difficult and you can wonder if you would use the money for another company,” says Heikkilä.
Heikkilä also mentions Fortum Nokia tires and of SRV. For them, Russian holdings used to be productive, but now they are a stumbling block.
“All these losses are the result of the fact that the entire European world order changed with the war in Ukraine.
What about the fledgling stock market boom?
Was Fortum’s rumbling surprising, despite the fact that the Russian risks were known?
Stock Exchange Foundation Managing Director Sari Lunasmeri recalls that when Uniper was chosen as Fortum’s investment target, there was a lot of criticism about why Fortum was buying energy from fossil fuels. However, no one could predict the war or the scale of the disaster, he reasoned.
Since the end of the summer, the stock market has seen a rapid rise after the stock market crash at the beginning of the year, but it is difficult to tell the future direction of stock prices. According to Korpivaara, the only sure thing is that uncertainty and uncertainty will continue.
Heikkila now wants to see if a recession is inevitable and how much central banks will have to raise interest rates.
“We’re probably going to get some sort of slowdown or recession,” he reckons.
According to Heikkilä, investors should look at the 10-year interest rate because it shows how the market thinks central bank actions will affect them.
“The market has come to believe that central banks’ actions to slow this inflation will work and it won’t get out of hand.”