25. March 2021 | 08:23 CET
Bitcoin Group, Upco International, Deutsche Telekom: Your money is at stake!
While Germany remains in lockdown, the world continues to turn. Especially in China and the US, the economy is already starting up again nicely. In recent weeks, this has stoked inflation fears. In the meantime, the central banks are reacting to the extent that they are once again buying more bonds to push down yields. In the future, one could also see inflation in Europe less as a target value and more as a target corridor. An overshooting of inflation is thus all the more likely. We present three stocks and explain whether they can benefit from the current environment or not.
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ISIN: DE000A1TNV91 , CA9152971052 , US2515661054
Bitcoin Group: The market no longer rewards growth
Bitcoin Group is the German pioneer when it comes to blockchain and cryptocurrencies. The Company from Herford operates its crypto exchange Bitcoin.de, has a bank on offer and continues to develop products around the blockchain. This technology is capable of turning finance upside down, as it promises efficiency gains and cost reductions. One example is securitization. While the process used to be complex and therefore expensive, today, there are even offerings that securitize shares in expensive bottles of wine. Whether a wealthy wine connoisseur has the bottle in his cellar or whether one hundred private investors with small amounts share the bottle is virtually irrelevant thanks to the blockchain - only blockchain investors ultimately have to do without the enjoyment.
The Bitcoin Group share has recently dropped a little - on a three-month view, the value lost around 25%. But in parallel, cryptocurrencies such as Bitcoin continued to soar. On a three-year view, the stock is up just 21%. The current price level is just above the valuation that the stock reached in mid-2019. However, both the Bitcoin price and Bitcoin Group's business have evolved since then. Nevertheless, the stock is no good as an inflation play due to all the advance praise. Profits in the future are valued lower by the market in an inflationary environment. Despite its good prospects, the stock could still bob along for a while.
Upco International: anything can happen with this market capitalization
A blockchain stock in a broader sense is also Upco International. The Company buys up small mobile operators to give them more favorable purchasing terms for minute and SMS quotas. At the same time, it gains potential users for its own app, a kind of Whatsapp competitor. Upco Messenger should soon also offer payment services and be cheaper than established providers. Thus, the Company could soon earn in many areas: The newly acquired mobile customers often come from countries from which many people have emigrated in the past. Using the app and the payment function, relatives from Europe or the US, for example, can send money to their loved ones back home and at the same time keep in touch in a modern way. In addition to messaging, the app also offers data calls and video telephony. It was essential to Upco to provide the best possible quality even with poor data connections. These are good prerequisites for scoring points on the market.
Upco's stock has proved to be a hot potato in recent months. At times, hardly a week went by without the stock doubling in value - on a three-month horizon, it has posted a return of 350%. Since the end of February, however, the price has calmed down and stabilized above 15 cents. Since the Company is still only valued at around EUR 16 million, speculative investors still have potential. Even though Upco is a growth stock and these types of shares are less in demand in an inflationary environment: The Company is so small and the prospect of revaluation so great that the value is always good for speculative investment. Instead of chasing prices later, it can make sense to get your foot in the door when prices are low. But beware: the stock is only for hard-core speculators.
Deutsche Telekom: Boring, but worth a look
The Deutsche Telekom share is anything but speculative. After all, the stock gained 50% last year. Deutsche Telekom proves that size is everything in the mobile communications market. Most recently, the US provider Sprint was successfully integrated into the Group. Small mobile operators are struggling because customers are making fewer and fewer classic phone calls and sending text messages. This is driving down unit costs for minute or SMS quotas, especially for roaming. Many small companies are being driven to the brink of ruin. For this reason, Upco International is focusing on buying up smaller companies to offer them a purchasing pool. Telekom, however, does not have such worries: in 2020, revenue increased by more than 25% to over EUR 100 billion!
Although Telekom 2020 also suffered from the pandemic and earned less from roaming, for example, the figures show that telecommunications are a basic need. Which also makes the stock an effective inflation play. Telekom generates cash flows month after month. Unlike companies that do not earn money for several years, the stock suffers less from the inflationary environment. Nevertheless, the stock is unlikely to make any great leaps. For conservatively oriented investors, however, the stock remains an alternative. Those who prefer a more speculative approach should take a closer look at Upco. Here, a fraction of the capital invested can be enough to give the portfolio a yield kick.