The advantage of our momentum strategies - which aggregate and probe the evolution of analyst consensus in real time - is that they often allow us to see the clouds gathering on the horizon, and to arbitrate accordingly.

This is exactly what happened at Tomra. MarketScreener had sold its position in 2019, far from the peak, but anticipating the very sharp halt in the Norwegian group's growth.

Since 2021, its market capitalization has melted away, losing two-thirds of its value. In fact, it had reached an aberrant level - x127 profits - at a time when the first signs of a slowdown in business were on the horizon.

After a phase of rapid expansion, sales have now reached a plateau, while cost inflation has continued unabated. As a result, Tomra is facing a brutal squeeze on its margins.

Reflecting these structural difficulties, profits at the end of 2023 were almost identical to those at the end of 2013 - a return to square one after ten years - even though sales had doubled over the period.

In 2024, for the first time, analysts are anticipating a single-digit return on equity, and the Group's quarterly results published last Friday will not change their consensus.

In the first three months of the year, sales stagnated and rising operating expenses led to a 43% fall in operating profit before depreciation. At the same time, the flow of new orders declined in both recycling and food segments.

Under these conditions, the refinancing of Tomra's credit facility, which is due to take place next year, will undoubtedly be on unfavorable terms. Despite all this, the Group's shares continue to trade at around thirty times earnings - in other words, at the multiple of a company enjoying sustainable growth.

Investors are undoubtedly pinning their hopes on the evolution of European regulations governing recycling and waste treatment. In fact, Tomra was a very active lobbying force during the discussions surrounding the PPWR, which was adopted by the European Parliament last week.