Revenge month on the stock market — April was a very strong month after the extremely weak performance in March
The broad Stockholm Stock Exchange (OMXSPI-GI) rose by 5.0% and the world index (Dow Jones Global Index) by as much as 9.9%. The small-cap index (Carnegie Small Cap Return Index Sweden) was initially very strong in April, but pulled back somewhat towards the end and landed at +4.7%.

Variations in the market's "mood" create opportunities in new sectors
The strategy in our management can be simply described as owning companies that have proven themselves to be of high quality through a strong financial track record, combined with good reason to believe that the future also looks bright. An important and decisive addition is that the companies in question must also be attractively valued.

At a high level, the stock market is often described through the metaphor of "Mr. Market," who is manic-depressive — one day he is manic and sees only upside and potential, while the next he is depressed and sees only downside and risk. This forms the basis of the market's sharp movements, both up and down. In reality, Mr. Market does not act only on the market as a whole, but also in different "pockets" of it where his mood can differ markedly.

These movements create recurring opportunities to take profits in overvalued companies and invest in quality companies that have temporarily lost the market's confidence.

We see such an opportunity today within medical technology. During the Covid era, valuations were driven up by structural growth, ESG flows, extremely low interest rates and temporary demand effects. Today the picture is the opposite: higher interest rates, normalized demand and increased cost pressure in healthcare have led to lower, more subdued growth and, in particular, significantly lower valuations.

The combination of lower growth and higher discount rates has compressed valuations, even though the fundamental development of many companies has continued to be strong.

We have identified two such companies — Bonesupport and Xvivo — whose businesses look more promising than ever, yet whose valuations have been slashed and have now become highly attractive. In this letter we will review these companies and why we now believe we are seeing two very compelling opportunities.

Read the full monthly report with company commentaries etc. in the attached file.