Danish ADRs: Novo Nordisk and Torm

In this post lets take a quick look at two companies from Denmark. These are the only two Danish stocks traded on the organized US exchanges.

1. Novo Nordisk (NVO)
Novo Nordisk is a healthcare company focused on the discovery, development, manufacturing and marketing of pharmaceutical products. It operates in two segments: diabetes care and biopharmaceuticals.

“The diabetes care segment covers Co.’s insulin franchise including modern insulins, human insulins, insulin-related sales and oral antidiabetic drugs as well as GLP-1 compounds in development for both the treatment of type 2 diabetes and as an anti-obesity agent. The biopharmaceuticals segment covers the therapy areas hemostasis management, growth hormone therapy, hormone replacement therapy, inflammation therapy and other therapy areas.”

NVO first started trading in the US markets in 1991. As of August 5th this year, the stock is up over 40%. Novo Nordisk announced on this week that operating profit rose by 19% in the first half of this year.Announcing the interim results, CEO Lars Rebien Sorensen noted “We are also very encouraged by the continued progress within our pipeline including both new insulins, liraglutide for obesity and haemostasis projects.” This company operates in a highly profitable niche area of the drug industry. Investors in the stock have done extremely well over the years. For example, as of July 30th a $10,000 investment in this stock five years ago would have grown to $36,114.

2. Torm A/S (TRMD)
Founded in 1889, Torm is shipping company engaged in the ownership and operation of deep sea product tankers and dry bulk carriers.”TORM consists of two business segments: the Tanker Division and the Bulk Division. The Company’s product tankers primarily carry refined products, such as naphtha, gasoline, gas oil, jet fuel and diesel oil. Its dry bulk vessels carry commodities, such as coal, iron ore and grain. As of December 31, 2009, the Company’s fleet of owned vessels consisted of 64 product tankers and four dry bulk carriers.”

Up until the global financial crisis, the Torm ADR had a great run. The high dividends paid at the time also attracted investors. However business fell drastically with the global collapse in shipping since the crisis began. As a result TRMD plunged to below $10 a share. The company also many of the management and experience workers recently. Torm posted a pre-tax profit of just US $3.0 million for the first quarter. With falling earnings the company suspended its highly dividend payments on the common stock. In May, CEO Jacob Balslev Meldgaard bought 100K shares thus showing confidence in the future of the company. At the current price of about $8 a share, Torm is a good investment for investors who are willing to hold it for at least a few years.

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