Multi Currency Portfolio Update #19

by | Jun 4, 2008 | Multi Currency Investing

Multi Currency Portfolios Course Summary – Update #19 – Multi Currency Equity Investments.

Your multi currency portfolio course is currently studying seven equities that have performed well during the November 2007 to March 2008 global stock market downturn.

The multi currency shares are:

Samsung Electronics-GDR COM
Adidas AG
Vestas Wind Systems
Kurita Water Industr.
Hyflux Ltd
Novo Nordisk B

Here is how these multi currency shares performed from November 2007 to April 2008.

Share Portfolio Invested Val. Apr.

Samsung Elec Blue Chip 50,000 58,458
Adidas AG Blue Chip 50,000 52,183
Vestas Wind Syst. Green 51,000 63,250
Kurita Water Ind. Green 51,000 54,937
Hyflux Ltd Green 51,000 53,127
ABB Ltd Infrastructure 50,000 52,005
Novo Nordisk Danish Health 50,000 56,294

This update looks at the Novo Nordisk B share which is in the Danish health portfolio.

Here is how that portfolio performed from November 2007 through mid May 2008.

Name Invested Amount Mid May Value
Genmab 50,000.00 39,903.33
NeuroSearch 50,000.00 36,475.09
Coloplast A/S B Aktie 50,000.00 49,584.82
Novo Nordisk B 50,000.00 56,294.62
Alk-Abello B Aktie 50,000.00 28,053.46
William Demant Hld. 50,000.00 43,180.33
Total 300,000.00 253,491.66

Swiss franc loan 200,000.00 220,164.59
Interest at 4.375% 5,377.98

Total Liabilities 225,542.56

Net Amount 27,949.09

Everything went wrong at once. The shares fell and the borrowed currencies rose.

Keep in mind if this were a real portfolio, defensive action would have been taken long ago..but our goal here is to learn. So we leave the portfolios alone for a year…to see what happens and learn from the market as it unfolds.

Yet despite the slaughter to the other shares in this portfolio, Novo Nordisk B shares have risen 12%.

Novo Nordisk is the world’s largest maker of insulin…a growth industry during he times of food shortage.

A recent article Multi Currency Investing Beats Inflation
points out that “U.S. food prices will rise a stiff 9 percent a year through 2012, the largest increase since 1979.

At that rate, by 2012, twenty dollars will not be enough to buy a gallon of milk, a dozen eggs and a small loaf of bread.

As food grows in cost people eat more less expensive, higher carbohydrate food. Too many carbs in the diet encourages diabetes.

Diabetes creates a demand for insulin.

Inflation and a shortage of food in the world makes insulin a growth product.

Novo Nordisk says at their website: “Novo Nordisk is a healthcare company and a world leader in diabetes care. In addition, Novo Nordisk has a leading position within areas such as haemostasis management, growth hormone therapy and hormone replacement therapy. Novo Nordisk manufactures and markets pharmaceutical products and services that make a significant difference to patients, the medical profession and society. With headquarters in Denmark, Novo Nordisk employs approximately 26,000 employees in 80 countries, and markets its products in 179 countries. Novo Nordisk’s B shares are listed on the stock exchanges in Copenhagen and London. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For more information, visit”

Jyske Bank has an ACCUMULATE recommendation after excellent first quarter 2008 accounts. Sales of the company were as expected but earnings were a positive surprise
in the first quarter.

Remember what we look for are shares of well managed companies in growth industries…available at a good value…with rising earnings and that have captured the attention of the market (ie price is already on the rise).

Novo Nordisk is obviously well managed. It had sales of 10.6 billion in the quarter which was up eight percent (8%). Jyske believes that Novo Nordisk’s growth and earnings prospects are more positive than the market. They estimate that the company will be able to report sales growth of 8% on average for the next ten years.

This belief is based on:

1. The diabetes business continuing to grow.
2. Novo Nordisk’s growth hormones will continue winning market share.
3. The company will not be hit noticeably when the patents on
NovoSeven and the insulin analogues begin to expire in 2008/2011.

Jyske is not worried about the patent expirations because the launch of insulin is enormously expensive. Novo Nordisk is protected by high entry barriers
which may make the introduction of generic products difficult.

The shares are not an especially good value with aPE ratio of 22 and a divided yield of 1.51%

What captured the markets attention Is that Novo Nordisk operating
profit DKK 2.8 billion (US$580 million) was up +22%.

This profit came in part because the firm managed to raise its gross margin more than expected. Sales and distribution and research and development costs were
also below the expectations of analysts.

Novo Nordisk has now increased it projections for 2008:

1. Sales will increase by 10-13%.
2. Earnings exclusive of one-off costs will rise by close to 25%.

Jyske Bank has a 12- month price target is DKK 375. The ADR price June 4 was $65.20 or DKK 313.


Join me with Jyske Bank for our next International investing courses

In North Carolina October 3-5

In Ecuador November 7-9