19. March 2021 | 07:00 CET
Bechtle, Revez, Deutsche Bank: Digital is better
There is no doubt that digitization is a trend that is here to stay. The experts at ClearBridge Investments have identified a boom in fintech. The pandemic, they say, is giving many innovative solutions a tailwind and further transforming the financial industry. "Shares of some newly listed, consumer-focused fintech are soaring on the back of rapid growth and strong investor demand. Likely fueled at least in part by high liquidity in capital markets and investor focus on fast-growing companies," said an analyst at the investment firm. But there are also digitization opportunities among established stocks that are not from the financial sector. We take a closer look at three stocks.
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ISIN: DE0005158703 , SGXE83751573 , DE0005140008
Bechtle: Digitization Made in Germany
When it comes to digitization, the system house Bechtle is the first port of call for many. Bechtle supports both companies and public authorities. The classic system house business accounts for about two-thirds of revenues, with the remainder coming from the wholesale of hardware and software via the Company's eCommerce platform. Bechtle was also able to increase its figures last year. After all, remote solutions became necessary within days in March 2020 and many employees had to be equipped with mobile devices.
Even if the share was able to gain around 80% over the course of a year, sand has been in the machine for some time: within the last three months, the value has lost around 10%. Recently, the Company countered this trend by cosmetically improving the share price and distributing generous gifts to shareholders. The Company is distributing two free shares for each share certificate and is also increasing the dividend. As a result, the share is visually favorable and should also increase liquidity. Bechtle remains an interesting company and is particularly strong in the DACH region. In recent years, the Company has grown consistently. However, Bechtle is not a hype stock.
Revez: High margins, exciting business areas, low valuation
The investment story of Revez offers more ingredients to trigger a rapid price rally on the stock market. The Singapore-based Company offers, among other things, interactive multimedia and communication solutions. As the pandemic has shown, one can conduct many business meetings virtually. While there is likely to be a trend toward face-to-face meetings after returning to normalcy, virtual solutions remain an alternative. The regular Zoom meeting is already a part of life for many people today and has become commonplace. Revez should benefit from this development. The Company has recently been consistently increasing its sales in the double digits and offers a gross margin of almost 60%. In addition to international customers such as Microsoft and PayPal, Revez also works for public-sector clients and digitizes museums' services, for example.
During the pandemic, the latter offers are already gladly accepted by users. So far, Revez operates exclusively in Asia and offers the business areas of information and communication technology (ICT), deep tech in the areas of artificial intelligence (AI) and Internet of Things (IoT), industrial automation, cybersecurity and MICE support. Within the business units, which subsidiary companies manage, Revez is pushing synergies and economies of scale. In the long term, expansion beyond Asia is also conceivable. With a market capitalization of around EUR 25 million, Revez is a promising small-cap that has not yet been discovered by the market. The sales and also the field of activity are right. The stock is attractive.
Deutsche Bank: Setbacks still possible
The Deutsche Bank share is also interesting - but unfortunately, this has been true for about a year. In recent years, the former flagship bank has turned into a small but delicate institution. Especially in investment banking, things quickly got back on track. This business is cyclical but highly profitable. Since share prices are rising and deals between companies are also increasing again, things are also looking rosy for Deutsche Bank. The Frankfurt-based Company is also benefiting from the SPAC boom, in which fintech, for example, is brought into stock market shells - the fact that Deutsche Bank focused on investment banking early on is now paying off even more.
There is also little to say that the recent trend will not continue in the current market environment. However, for private investors who are only now getting involved with the share, the prices may already have gone a little too far. In this case, it is important to remain calm over the next few days and to use weak days to enter the market. In the long term, the share is still at the beginning of its catch-up movement. Setbacks cannot be ruled out - investors should use them wisely.