My Money / Cash Flow System

Check out my amazing Photoshop skills!

This is my cash-flow. The banks I use are Länsförsäkringar, Santander and Avanza and Nordnet. As you can see, money goes into Buffer 1 and it goes out from my debit card account. Money also comes into my Investments accounts, from the dividends I receive.

Now this whole scheme works like this, money comes in and I spend some. after the month, I transfer money so that buffer 1 is 10.000 SEK, all excess of that goes into buffer 2, until it is 50.000 SEK. All excess of that, goes into my investments!

At the end of each month, I move the money around to achieve the 10k and 50k buffers.

Even though I have only used this for one month I think this works great for me. Because I get motivated to not spend so much, the more I beat my budget, the more stocks I get to buy!

Do you have any kind of system for your money? What do you think of mine?

Happy savings!



Skanska was founded in 1887, when Aktiebolaget Skånska Cementgjuteriet (Skånska cement foundry Inc) was established. It diversified into a constructions company and with the listing on Nasdaq Stockholm in 1965 “Skanska” became the official name.

Skanska is one of the world’s leading project development and construction groups, concentrated on selected home markets in the Nordic countries, other European countries and in North America. With a focus on green construction, ethics, occupational health and safety, Skanska offers competitive solutions – not least for the most complex assignments.

What do they do? Skanska is a company active in Construction(62%) Residential property development (9%) Commercial property development (23%) and Infrastructure development (6%). (percent of operating profit)

Where do they do it? Skanska is active on the following markets: The Nordics (43%), North America (33%) and Europe (24%). (percent of revenue)
Why do they do it? People need homes to live in, offices to work in, and infrastructure to transport oneself between those two. People also need public properties, such as schools and hospitals.

Sufficient size, Market cap > 1 Bn EURPass Skanska is listed on OMX S Large Cap. and has a market cap of 74 Bn SEK
Strong Financial Position? Current Ratio > 2 Fail Current Assets / Current Liabilities = 1.28
Current assets > Total Liabilities? Pass Current Assets / Total Liabilities = 1.04
EV/NOPAT > 17? Fail EV/NOPAT = 36.2The current assets are not double the current liabilities. They bind lots of capital and have large real estate assets. This is however similar to other building constructions companies. The assets are larger than the total liabilities, but the EV to NOPAT is too high. This is partly due to the nature of Skanskas business being highly capital-intensive.
How are the earnings?Positive Net Earnings the last 10 years? Pass
What is the 5 year average EPS growth? Fail 5 yr avg EPS growth is only 11.25%
EPS 5 year CAGR (3 year average)Fail 5 year CAGR(3yr avg) = -12.8%

The company has more than 10 years of profits, but the EPS growth is too low, only about 2% annual growth. The EPS 5 year compounded annual growth rate calculated using 3 year averages is negative. The growth in other words is very low.

Lets look at Skanskas Dividends
Do they pay stable dividends? Pass Skanska has paid dividends for more than 10 years
Payout Ratio Fail 73% 2014 5yr average 64%
EPS Growth compared to Dividend Growth Pass5 year average dividend growth is smaller than the 5 year average EPS growthSkanska has a nice dividend history, the payout ratio is very high, and it has been high for many years. The dividends are high compared to the earnings, the payout ratio should decrease since the dividend growth is lower than the EPS growth. However the earnings need to go up quite a bit for the payout ratio to reach a comfortable 50%.
How’s the market?
Is the company reliant on external factors? Fail It is reliant on the rates and the economic drive as a whole. But the need for housing and construction will probably remain high.
How is the market situation?Pass I think the need for building and construction is high, and I think its going to remain high in the future
Is the company reliant on innovation or high-tech? Pass It is not a tech-company or reliant on R&D.
Is the company ethical? Pass Yes, I think Skanskas values are sound and they fill my requirements of an ethical company
Is there a beneficial ownership structure? Pass Industrivärden holds 24% of the votes and Lundergs holds 12%. I see this as very positive

Well, this is positive. Very strong owners and a good market situation.

Comparison to competitors 3 year average revenue (Mn SEK) Pass Skanska (136,421) NCC (57,305) JM (13,099) PEAB (44,532)
How are the margins? Fail Skanska (2.5%). NCC (3%) PEAB (4%) but very volatile. (JM 9%) (!)
What is the ROE compared to competitors? Fail Skanska (18%) NCC (22%) PEAB (12.5%) JM (28%) Yield Pass Skanska (3.8%) NCC (4.5%) PEAB (3.6%) JM (3.4%)
Dividend growth Pass DPS 5yr CAGR, Skanska (23.48%) NCC (24%) PEAB (neg) JM (35.6%)
Debt/Equity Fail Skanska (3.334) NCC (3.397) JM (1.5) PEAB (2.55)

Skanska is the largest as far as revenue goes. But has low margins and ROE. Skanska is Yielding 3.8% and has a nice dividend growth. Building and construction is a capital-intensive business, but Skanskas debt to equity is pretty high compared to its competitors.

How is the current valuation?
Price per share as of 2015-10-13 is 174.9 SEK
EV/E Fail 39.69
P/E Fail 17
P/E (ttm) Fail 19
Dividend yield Pass 3.8%
P/(Book-Goodwill) Fail 5.8

The EV to E is high because of the high debt. The company is expensive in my opinion.

What price could be interesting? Well, At a P/E of 15, the price per share would be 138 SEK At a dividend yield of 4%, Price per share it 168 Sek At P/(Book-Goodwill) of 3, the price per share is 95 SEK

Conclusion Wow, This became a dense post, but I enjoyed analysing Skanska very much, but what conclusions can we draw? I ended up with 13 Pass and 13 Fail

The biggest turnoff is the lack of earnings growth and the relatively high debt to equity. However, I think the building and constructions demand is and will remain positive for Skanska. Also Lundbergs and Industrivärden is a great owner.

I am not going to buy Skanska at the current price. If the price reaches a yield of 4% I might consider buying and if the price reaches P/E 15, I will buy.

That’s it for this post! I hope you enjoyed it, I really learned a lot and it was very interesting!

Best regards

Disclosure: I do not own any shares of Skanska (2015-10-14)

Please remember that I am a happy amateur, don’t make any investing decisions based upon my analysis. Always do your own analysis!

Three Pillars of Life, managing risk in life

The Three Pillars is kind of a system to help with managing risk in life, the pillars are: Financial, Career and Family.

The idea is that if you have security on two pillars, you can have a higher lever of risk in one pillar.
For example: If you have strong finance and a supportive partner, You have security in the financial and family pillars. This allow you to take risk in your career, for example starting your own company or changing job.

If you for example have a job you like that gives you a good inflow of cash, and you have security in the family pillar, you can take more risk in the financial pillar, for example having a higher percentage of your capital invested in stocks.

Finally, if you have security in your career and financial pillars, you can take risk in you family pillar, for example this could be getting a child,or a pet.

I think it can be difficult to asses the security of your pillars sometimes, but the main thing is, don’t go without a job, and then take big financial risks. Or it might be a bad time to quit your job when your financials for some reasons is down the drain! And it might be a bad idea to get children when you don’t have a job, or if your can’t afford it.

I like thinking in terms of these three pillars when i think about where I am today, and how I can get to where I want.

Hope this is of some use to someone!


PS Thanks to Günther Mårder, credit for this idea to him!

Summer 2015: Two months work in Oslo

Me and my girlfriend decided to go on a small adventure this summer. So we thought going to Norway and work for the summer would be a nice change of environment. So we began by booking the flight, then found an apartment to  rent. 2 days before takeoff my girlfriend gets booked for an interview. It was the same day we landed, and she got the job straight away. The first thing that happens for me when we land, is that my cell happens to get some wi-fi and I get booked for an interview for the same workplace!

It was very, very, very boring work. But that was good. First it was decent, the work was boring but everything was still new. After about 2 weeks it got pretty boring. The good thing was that I could let my mind wander, think about what I want to do in life. And I was puzzled by some of the people who have been doing that same job for more that 5 years, don’t they want to go further in life?

Having that really boring job, motivated me to do stuff and I feel re-energized! And I came up with so many things I want to do!

Continue reading Summer 2015: Two months work in Oslo

The future for my portfolio

As a first blog post I have decided to talk about where i want my portfolio to go and my investment strategy.
Currently I would say that my portfolio is kind of speculative, wich is not so good in the long run. Sure you can get lucky and strike gold (I recently sold Stockwik förvaltning at about 115% profit). Or you can some shiny dirt (My very first stock was Kinnevik, a stock I sold at roughly 20% loss).

I have decided to learn from my mistakes.

And I have decided to change the course of my portfolio.
Starting with my purchase of  ICA Gruppen yesterday for about 1/3 of the capital I have in the market. A turn towards high security, steady dividend paying companies. This is a turn i really like and a path i will keep going on. I plan to sell most of my speculative stocks which are about 2/3 of my portfolio and increase my holdings in ICA and similar stocks.

My plan is to get dividends each month of the year.

In the US its common for companies to pay dividends quarterly, Swedish companies usually pay dividends annually. My plan is to achieve a portfolio that pays dividends every month, dividends that allow me to buy stocks no matter the market. It would be nice to have a significant income from dividends.

Buy, Buy, Buy

I am going to reach this goal by finding quality stocks, with a history of paying and increasing their dividend payout. I am going to buy stocks regularly and long-term, in order to get a good average buying price and to ease out on the effects of market swings.

I hope you enjoyed my first post, there will be more to come!