April 28th, 2022 | 13:32 CEST
Alibaba, Netflix, Meta Platforms, Globex Mining - Find the best turnaround stocks in 2022!
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Alibaba Group - Unjustly on the sidelines
Chinese e-commerce specialist Alibaba Group is one of the most prominent foreign ADR losers on NASDAQ. Starting with the trade conflict between the US and China, the downward trend continued due to constant regulatory interventions by the Chinese authorities until even American technology funds such as ARK Innovation Fund threw in the towel. At a low of around EUR 66, the stock lost a full 75% from its high in the fall of 2020. At the moment, the price is recovering slightly above EUR 80.
Operationally, the Company never fared particularly poorly - on the contrary: revenue grew at constant rates of 30-50% per year between 2018 and 2021, and earnings also developed extremely dynamically to USD 8.20 per share in 2021. At a current price of USD 84, the China stock is currently trading at a historic valuation low with a P/E ratio of around 10. The market capitalization of EUR 217 billion reflects 2 sales, and experts still estimate growth at rates of 10-15%.
For a long time, investment legend Charlie Munger was considered one of the few remaining investors who, despite the catastrophic price development, continued to believe in Alibaba and constantly increased their investment. But now, Munger's Daily Journal Corporation sold about half of the former 602,060 Alibaba shares. For the community, this is a clear sign of a "throw in the towel." Long-term fans of the Chinese tech stock should re-enter at around EUR 80!
Globex Mining - Optimized investment in over 200 properties
"Do not put all your eggs in one basket" is a well-known investment philosophy. Especially in the field of commodity exploration a broad diversification can significantly increase investment success, as the different commodities often correlate negatively and thus keep the overall port fluctuations low.
The Canadian explorer Globex Mining follows this investment approach and has been involved in more than 200 projects over the years. Globex is a very experienced company, consistently developed by industry veteran CEO Jack Stoch. The Company's primary objective is not to build an investment-grade mining operation but rather to optimize and maintain its broadly held properties. In addition to its many holdings in gold, silver, copper, platinum and palladium, as well as base and specialty metals, the Company also has a well-filled treasury so that it can always make additions or new acquisitions if necessary. The deal flow has always led to an increase in the value of the holding in recent years.
Currently, Globex is announcing news on the investment Maple Gold Mines Ltd. regarding exploration drilling on the Eagle gold mine property, which Globex acquired in July 2021. Phase 1 has now been completed with eight drill holes, and a Phase 2 drill program is currently in the permitting process. Assay results are pending; however, initial drill core sightings from Eagle are very encouraging. Several drill holes show semi-massive pyrite-iron carbonate and other types of mineralization known to be gold-bearing. Initial assay results from the Phase I program at Eagle are expected to be released in the second quarter of 2022.
Globex Mining has nearly doubled on the stock market since January 2022. Its prospective projects are paying well on the Company's value, which has now moved upward to CAD 77 million. In addition to its home exchange in Toronto, the stock is also tradable on German exchanges. With an increasing inflation trend, Globex Mining is excellently positioned in the commodity market.
Netflix or Meta Platforms - Which Nasdaq stock to bet on now?
Two well-known protagonists of the NASDAQ have been hit hard recently. Both Netflix and Meta Platforms experienced a sharp sell-off after investors were surprised by slightly lower growth numbers. Notwithstanding the losses of over 50%, the intense price reaction also shows the very high valuation of the long-loved FAANG stocks.
Now, at a significantly reduced price level, the question arises whether the "Fallen Angels" are suitable for new investment. Elon Musk, with his acquisition of Twitter, shows that the lower valuations are also suitable for an acquisition at times. Netflix and Meta Platforms are valued at P/E ratios of 18 and 13, respectively, after their correction. Netflix now only comes to a factor of 2.5 in its revenue valuation, but there are doubts about the business model's sustainability. Estimates for the next few years have only been given 10% growth. In the last 2 years, this had sounded quite different. Out of 7 current analyses, the experts only dare to give a "hold" rating. However, the average price target is still USD 351.
The advertising giant Facebook is now listed at a 2-year low with a 4-fold revenue valuation. Nevertheless, annual growth is seen at a solid plus 15%. Earnings per share are even rising disproportionately. The debt-free Company achieves free cash flows of 20% on sales per year. These are first-class growth figures, confirmed by more than 30 analysts. A total of 56 experts rate the Company as Buy to Hold. The average price target is USD 304 - 67% higher than the current price of USD 181. In a direct comparison, Meta Platforms seems significantly more attractive than Netflix!
In times of strongly rising inflation rates, investing in stocks is exposed to considerable fluctuations. Growth stocks, in particular, suffer from rising interest rates, and their intrinsic value falls. At the current correction levels, we find Alibaba and Meta Platforms interesting. Globex Mining shines due to its broad positioning and the lush portfolio of opportunities in the commodities sector.
Conflict of interest
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