Stendörren Fastigheter AB (publ) (STEF-B.ST) : juste valeur

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Stendörren Fastigheter owns and develops rental residential and commercial property in Sweden, with the bulk of its income coming from long-let apartments and commercial space rather than trading or development sales. Its moat is the unglamorous kind: a large, stable rental book in a market where new supply is slow, operating margins near 74% show how much of each rent krona reaches the bottom line, and the 79.9% gross margin reflects a cost base that barely scales with revenue. Revenue growth of 18.6% is the number to test, since it probably reflects acquisitions and indexation rather than organic letting, and that distinction determines whether the growth is repeatable. At 14.8x trailing and 10.9x forward earnings, the market is pricing the forward year as a step up, which only makes sense if the acquisitions are being absorbed without diluting returns. The 5.8% ROE is the figure to weigh against that: it is low for a business with margins like these, which points to heavy leverage or a large equity base carrying low-yielding assets, and the analyst should check the debt load and the spread between property yields and financing costs before going further.