Europris: 7% Yield On Groceries Only Found In Norway

Oct. 31, 2019 2:12 AM ETEuropris ASA ADR (ERPSY)21 Comments


  • Europris is a Norwegian discount chain with sales in a variety of segments, including groceries, home improvement goods, specialty retail and general merchandise.
  • Due to the national character of Norway, the company cannot really be compared to its international competitors or peers.
  • When seen in such a way, Europris is appealing despite certain indebtedness and very little cash reserves, and warrants at the very least some attention.

Those of you who know my articles know that I'm a big fan of investing in the national grocery infrastructure of a nation, including ICA Gruppen AB (OTC:ICCGF) and Axfood (OTCPK:AXFOF) in Sweden, as well as Kesko (OTCPK:KKOYF) in Finland. You may also have noticed that I steer away from home improvement/electronic retailers found in the same space, such as Clas Ohlson and other names European/Scandinavians may invest in.

Norwegian company Europris (OTCPK:ERPSY) has a number of things speaking against investing in it. It certainly isn't a pure grocery play. Not only does it sell tools and home improvement goods, but it also sells clothes and other more risky ventures. The company's debt is high, and the payout ratio is alarming when seen next to the debt and forward investment requirements.

However, a combination of national specifics to Norway as well as positive growth catalysts makes this company an interesting play in the long term - and one I may be happy to invest in.

Let me explain the reasons.

Bildresultat för europris

Europris - Merely a ~5-year history

The development of Europris during its time on the Oslo stock market has not necessarily been one of positive share price growth.

(Source: Avanza)

Initial expectations for the company were high. I remember the IPO at the time, and I distinctly remember my thought process as well - that a mixed bag of groceries, clothes and general merch would have to do a lot of structuring prior to becoming a truly profitable operation on a national scale. I did not invest in the IPO, and it seems I was right in not doing so. The company wasn't ready at the time and required lots of capital and care.

So, just what is Europris?

(Source: Company Investor Presentation, 2019)

To use the company's own, somewhat (in my

This article was written by

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Mid-thirties DGI investor/senior analyst in private portfolio management for a select number of clients in Sweden. Invests in USA, Canada, Germany, Scandinavia, France, UK, BeNeLux. My aim is to only buy undervalued/fairly valued stocks and to be an authority on value investments as well as related topics.

I am a contributor for iREIT on Alpha as well as Dividend Kings here on Seeking Alpha and work as a Senior Research Analyst for Wide Moat Research LLC.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ERPSY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment.

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