12. October 2021 | 11:32 CET
Alibaba, TalkPool AG, Deutsche Telekom - Here are reasons to buy!
Alibaba's share price has been firmly in the grip of the bears lately. With a loss of more than 60%, the share is one of the hardest-to-fall tech giants since the end of 2020. However, one of the world's fans is not fazed by the share price decline: Charlie Munger. Together with Warren Buffett, the 97-year-old still runs Berkshire Hathaway - one of the most successful investment companies of all time. Munger has already stealthily made another grab at Alibaba while others were saying goodbye. He is not alone on Wall Street in this, even if analysts are still holding back anxiously. We take a look at a few interesting IT players.
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ISIN: ALIBABA GR.HLDG SP.ADR 8 | US01609W1027 , Talkpool AG | CH0322161768 , DEUTSCHE TELEKOM ADR 1 | US2515661054
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.
Deutsche Telekom - A major investor makes a shift
Deutsche Telekom recently increased its stake in its subsidiary T-Mobile USA substantially to 48.4%. To finance the transaction, which cost around EUR 6 billion, Deutsche Telekom issued new shares and sold its business in the Netherlands. The Bonn-based Company was then able to acquire around 45 million T-Mobile USA shares from the Japanese conglomerate SoftBank through a capital increase against contribution in kind. In return, SoftBank received approximately 225 million new Deutsche Telekom shares and became the second-largest shareholder behind BRD with 4.5% of the outstanding shares.
But then came the big reshuffle at SoftBank. Last week, the Japanese technology investor put almost half of its stake in Telekom up for sale. As a result, the share certificates lost more than 5% in value and did not recover in the course of the week. After 90 million shares were offered by SoftBank, the T-Share even fell back to the chart-technically important 200-day line. It was still there yesterday. If this line were to be broken, further setbacks would have to be expected.
From an analytical point of view, however, the share is now really cheap. Its 2022 P/E ratio of 13.7 and P/B ratio of 2 places it in the lower third of the valuation range among telecom stocks, and it also pays out a dividend of 3.8%. In our opinion, the current correction is, therefore, a good medium-term buying opportunity.
TalkPool AG - Solutions for smooth communication
One of the many cooperation partners of Deutsche Telekom is TalkPool AG. Since 2000, the Swiss Company has been a technological driver in communications services, networks and digitization. Lately, however, the Company has also been on the move in the Internet of Things, which connects digitized production processes and monitoring functions with the Internet. Many applications that have been desired for years have become a reality with the Internet — smart home controls from afar, automated production processes. In short, the networking of physical and virtual objects through modern communication technology.
TalkPool's Telecommunications Network Services business unit encompasses important core competencies such as the planning, implementing, and maintaining of mobile and fixed telecommunications networks. The underlying service offering is developed based on the need for customized and flexible services from equipment manufacturers and telecom operators worldwide. Behind the end-to-end solutions are services for smart buildings and cities, with a focus on environmental control, energy-saving and damage prevention. TalkPool is thus a valued partner for services around public facilities.
TalkPool has set a revenue target of EUR 48 million and a corresponding EBITDA margin of 11%-14% for 2025. From today's perspective, this means a doubling of revenues in four years. We assume that TalkPool will be able to further expand the existing contracts with the major telecommunication providers, especially in Germany's digitization offensive and will be able to book a decent part of the EUR 25 billion household budget for itself in the next 5 years. Home office, streaming services and broadband communications are the drivers of this demand. For a flexible service provider like TalkPool, there is a lot to do here!
TalkPool shares have now been tradable in Germany for some time. However, the stock has already been listed on the Nasdaq First North growth exchange for 5 years. Interest in the DACH region should be very high because of its home base in Switzerland.
Alibaba - What a turnaround!
With an increase of 25% in just 5 trading days, Alibaba shares are attracting attention. On 5 October 2021, the share price reached its previous low for the year of EUR 119. Since then, it has been going steeply upwards every day, yesterday up to EUR 149. What happened?
Fearing the nationalization of major Chinese tech giants, prominent fund managers such as ARK Invest's Cathie Wood permanently sounded the exit bell. Investors followed in their thousands, selling their Alibaba shares at any price. As a result, the Company had lost nearly 60% of its value since its 2020 highs. The voices are now multiplying that the regulatory frenzy has only been dealt with once. The former darlings are already turning in and shooting upwards. There are no real fundamental reasons for this because founder Jack Ma's empire has been growing at a constant 25% per year for years. Followers of the share have experienced a tripling of the share price between 2016 and 2020.
From a chart perspective, the EUR 150 mark must first be overcome, then price targets of EUR 180 and more can be derived. However, the share price should not fall below EUR 125. The investment legend Charlie Munger is going against the opinion leaders of Wall Street and is continuously stocking up. Last week, we had already pointed out the existing buying opportunity. For new investors, the stop is now EUR 127.
The Internet has become a daily tool for almost everyone. Alibaba and Deutsche Telekom are local market leaders in their profession. For the Swiss Talkpool AG, large corporations must invest heavily in modern infrastructures, as then their order books are also packed to bursting.