September 5th, 2024 | 09:15 CEST
Bargain alert in Biotech, AI, Cannabis: Evotec, Cantourage, BlockchainK2 share instead of Nvidia?
The weak late summer months on the stock market often offer opportunities for bargain hunters - including at the moment and away from the large caps. For instance, Nvidia has already lost around 30% from its all-time high, but historically a drop of 50% or more is not uncommon for this AI high-flyer. It is, therefore, worth taking a look at fallen small and mid-caps. For example, Cantourage shares gained more than 10% yesterday alone. Is there more to come for the cannabis stock? BlockchainK2 shares are also ripe for a price surge. The SaaS platform for financial service providers offers cost and efficiency benefits thanks to blockchain and AI. The sentiment for fintechs - look at PayPal - is currently brightening noticeably, and BlockchainK2 is a takeover candidate. The same could be said for Evotec, or is there a risk of a slide to EUR 4? In any case, the Company is not finding any peace.
time to read: 4 minutes
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Author:
Fabian Lorenz
ISIN:
EVOTEC SE INH O.N. | DE0005664809 , CANTOURAGE GROUP SE | DE000A3DSV01 , BLOCKCHAINK2 CORP | CA09369M1077
Table of contents:
"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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BlockchainK2: Hidden Gem with upside potential and takeover appeal
The BlockchainK2 share is currently developing into a real insider tip. The Company, through its operating subsidiary RealBlocks, aims to disrupt the currently complex and expensive financial software landscape for the distribution of private equity and alternative investments. To this end, RealBlocks has developed a SaaS platform based on blockchain and AI designed to revolutionize the investor experience for asset managers, advisors, and investors alike. The platform is already being used worldwide by real estate, private equity, and alternative investment managers. The largest customer is currently likely to be LaSalle Investment Management, with assets under management of around USD 77 billion.
Including the financing round last fall, over USD 20 million has already flowed into RealBlocks. In addition to the management, the well-known US venture capital companies Crosslink Capital and Left Lane Capital are among the investors. As fintech and blockchain have not been the focus of investors in recent years, BlockchainK2 offers an exciting entry opportunity. The Company is currently only valued at around CAD 5 million, while the performance of fintech leader PayPal shows that the stock market is currently rediscovering the sector. And there are also signs of a shift in favorites among AI companies from first movers such as Nvidia and Microsoft to second-tier service providers. Both trends speak in favor of an investment in the BlockchainK2 share. Then, there is the takeover fantasy by one of the major financial software providers.
Cantourage share enjoying a second spring thanks to partial legalization
Cantourage demonstrated yesterday just how quickly shares from former hype sectors can be rediscovered. Following strong figures, the cannabis company's share price shot up by more than 10%. The cannabis provider reported revenue of EUR 24.9 million in the first eight months of the current year, already surpassing the total revenue of 2023 by EUR 1.3 million.
The main drivers of this rapid growth are the further expansion of the cannabis flower business in Germany and the UK and the expansion of the activities of the online platform Telecan. Telecan provides patients in Germany with a simple and direct route to cannabis therapy. Germany has benefited from the partial legalization of cannabis since April 2024. In August 2024, a new revenue record of EUR 4.9 million was achieved, almost tripling the figure for the same month in the previous year. Cantourage expects business to continue to develop positively until the end of 2024 and forecasts revenue of between EUR 37 million and EUR 43 million, with plans to achieve positive EBITDA.
Cantourage CEO Philip Schetter: "Our current business development clearly shows that we took the right steps in the run-up to the partial legalization of cannabis in Germany. In addition to expanding our product offering for high-quality cannabis from all over the world, we were also able to expand our production capacities and our partnerships with growers and pharmacies in good time. This now enables us to meet the expected increase in demand on a sustainable basis. We are confident that the medical cannabis market offers tremendous opportunities for us now and in the future."
Evotec share heading to EUR 4 before it gets better?
Is the Evotec share currently a bargain or not? There is no clear answer to this question at the moment. Yesterday, the biotech company's share price fell below the EUR 6 mark again and is thus approaching its 5-year low of EUR 5.06 from early August. This also put an end to the recovery initiated by insider buying - the CEO announced a new purchase at the beginning of this week.
Perhaps Deutsche Bank is right in this case after all and there is a threat of a further fall in the share price before it can rise again. The analysts at Germany's largest private bank believe that Evotec shares are fairly valued at EUR 4, as the restructuring initiated by the new CEO will take longer than many expect. Before things improve, one or two more negative reports are to be expected in the coming months.
The latest development at Evotec shows that the "clean-up" is not going entirely smoothly. The Company announced yesterday that Chief Business Officer (CBO) Dr. Matthias Evers will leave the Company effective October 1, 2024.
Evotec CEO Christian Wojczewski: "On behalf of the Management Board, I would like to thank Matthias for his commitment and dedication to Evotec over the past two and a half years. He has shown great leadership skills in difficult times, and his contribution will have a lasting impact. On a personal note, I would like to thank Matthias for the great onboarding and his continuous support in transitioning his responsibilities to other members of the Management Board." There will be no successor; instead, the CBO function's responsibilities will be distributed to other Board departments.
Evotec's share price will likely remain volatile, at least in the short term. In the short term, only a takeover bid is likely to lead to a significant rise in the share price, but then also end the long-term opportunities. In contrast, BlockchainK2 is a real hot stock with corresponding upside potential. A lot of money has already flowed into the SaaS platform, and sentiment towards fintech and blockchain is brightening. The share should benefit from this. The Cantourage share could also experience a second spring against the backdrop of the partial legalization of cannabis in Germany.
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