08. April 2021 | 13:10 CET
Aurelius, Deutsche Rohstoff, Mutares - Lighthouses
What do lighthouses have to do with investment decisions? Seafarers have always used lighthouses to determine their position to avoid dangers and shoals, among other things. Historians name the Egyptian Pharos of Alexandria as the oldest lighthouse in the world. If one transfers the important orientation function to investment decisions, renowned investors can represent these lighthouses. In the following, we present three companies that have repeatedly demonstrated a good nose as holding or investment companies.
time to read: 3 minutes by Carsten Mainitz
AURELIUS EQUITY OPPORTUNITIES - 3 acquisitions in a few weeks
The Aurelius share has continued its upward trend in recent weeks. The shares are currently trading at an annual high of around EUR 29, bringing the Company's total market capitalization to around EUR 870 million. The Munich-based Company took advantage of the low share prices in recent months to buy back its shares (3.16% of the capital stock).
At the beginning of March, CEO Matthias Täubl informed the capital market that he expected significantly more transactions in 2021 than in the previous year and that he intended to announce a completion in Q1. No sooner said than done - a few days later, the acquisition of HÜPPE GmbH, a leading European supplier of bathroom fittings, which generated sales of EUR 70 million in 2020, was announced. The acquisition of AutoRestore Limited, the leading provider of mobile accident repair services in the UK, followed in early April. In addition, BPG Building Partners Group GmbH, a subsidiary of Aurelius, announced the acquisition of GSB Gerüstbau Bobenheim-Roxheim GmbH with sales of EUR 8 million as an add-on acquisition.
Given this good corporate news series, it is therefore no wonder that the share price has risen in recent weeks. By way of comparison, Aurelius completed only 6 acquisitions in the whole of last year. In the current financial year, Aurelius intends to distribute EUR 1 per share to shareholders. In each of the two subsequent years, the distribution is to increase by EUR 0.25.
DEUTSCHE ROHSTOFF - Good year ahead
Deutsche Rohstoff AG identifies, develops and sells attractive raw material deposits in North America, Australia and Europe. For some time now, the development of oil and gas deposits in the USA has been the main focus of business activities. Often underestimated are the mining projects and investments that the Group holds in its portfolio. Acting opportunistically, Deutsche Rohstoff has proven good timing in the past when selling gold projects and US oil projects.
The Mannheim-based Company has once again demonstrated its good instinct. In mid-March, the Company announced that it had realized a profit of EUR 8.2 million on its investment portfolio in Q1. In the course of the Covid pandemic, Deutsche Rohstoff had built up a portfolio of shares and bonds in oil and gold stocks and has now partially sold this. In addition, there are still unrealized gains of EUR 3.8 million.
Furthermore, the Company reported a high increase in the oil portfolio's value to USD 211.6 million. As of December 31, 2020, this figure was only USD 128.8 million due to the significantly lower prices. Given this encouraging news, shareholders should quickly forget about the poor 2020 numbers, which were colored red again. 2021 will be a good year for shareholders of the Company. In addition to the oil sector and the investment portfolio, the subsidiary Almonty, which is preparing to become a major producer of tungsten, is particularly exciting.
MUTARES - Dividend of 7% beckons in May
Mutares acquires low-earning companies or parts of companies that are no longer part of a group's core business and are therefore being spun off or where a sale makes sense in the course of corporate succession. European companies with sales of EUR 50 million to EUR 500 million are on the shopping list. These companies should have a high development potential, an established business model and a well-known brand. The focus sectors are Automotive & Mobility, Engineering & Technology and Goods & Services.
The approach pursued by Mutares is long-term. Successful restructuring is only the first step. As an active investment manager, growth opportunities are constantly evaluated, including add-on acquisitions as part of a focused buy and build strategy. The investment strategy is characteristic of a private equity company and focused on the resale of the acquired medium-sized companies. The performance bar is set very high. Mutares aims to earn 7 to 10 times the invested capital upon exit. Because the management board also holds a significant stake in the Company and thus interests are aligned, investors can assume that no excessive risks are taken to achieve the return targets.
According to preliminary figures, consolidated annual sales of around EUR 1.6 billion were achieved in fiscal 2020 with over 12,000 employees worldwide in the Group. This figure is expected to almost double by 2023 (EUR 3.0 billion). Mutares allows shareholders to participate in its success in the form of dividends. The dividend consists of a permanent component (EUR 1) and a performance dividend. In May, the Company will distribute a total dividend of EUR 1.50. At a current share price of just under EUR 22, this corresponds to a yield of almost 7%. With a market capitalization of around EUR 340 million, the Company is favorably valued. Investors should add the stock to their portfolios as a good investment.