Bank: These Finnish stocks now have clear profit potential

Aktia Bank writes in his recent investment outlook that the most attractive opportunities for investors can currently be found in Europe and the Nordic countries.

Allocation director at Aktia Patrick Moring sees particular profit potential in the industrial sector if economic growth starts to show signs of picking up.

“If economic growth starts to show a turn for the better, there is a lot of profit potential in Finland and in the cyclical part of the market in Europe, led by the industrial sector. The valuations of small companies that have been rejected for a long time are also very low, and their profit potential is better than large companies,” Moring says in Aktia’s press release.

Especially in the US stock market and the power seven representing its technology sector, i.e Nvidia, at Apple, on Amazon, Metals, Alphabetilla, at Microsoft and Teslalla has a strong year behind him.

According to Moring, however, the turn of the interest rate cycle has brought out signs of a rotation to parts of the market that are lagging behind in development.

“We don’t think it makes sense to run after the narrowest group of upstarts, where good prospects are already visible in valuations. Rather, we believe that better returns can be obtained where the return development has so far lagged a little behind, and where there is more room for improvement,” he says.

Outside of large companies, interesting opportunities can be found in the United States through balance indices. However, the most attractive opportunities for investors are in Europe and the Nordic countries. There is also potential in the Helsinki Stock Exchange, with valuations being very low. Emerging market stocks are a more problematic case, as China’s problems do little to boost confidence.

“If economic growth starts to show a turn for the better, there is a lot of profit potential in Finland and in the cyclical part of the market in Europe, led by the industrial sector. The valuations of small companies that have been rejected for a long time are also very low, and their profit potential is better than large companies”, says Moring.

Aktia estimates that the global stock market’s entire return next year will be in the range of 7–9 percent. The return potential of the US stock market is estimated to be 6–8 percent and that of other markets 7–9 percent.

“Individual markets can produce clearly more, and it is possible to reach double-digit profits,” Aktia points out.