Brokers in the storm of digitalization - Commerzbank, wallstreet:online, Palantir, SAP

Commerzbank AG - Restructuring and growth in brokerage

So far, so good - stock market turnover is exploding, the environment is as it was in 1999 and one industry is profiting: The brokers and investment banks. In 2000, Commerzbank successfully floated its direct banking subsidiary and then, second-largest online broker, Comdirect, on the stock market. At that time, proceeds of EUR 870 million were generated. The stock market value peaked at EUR 1.8 billion in 2019, after which it was reintegrated into the Group.

For Commerzbank, the drought from 2008 to 2018 is probably now over. Currently, the Company is in a brilliant position again. A social plan for the job cuts has been drawn up, and the restructuring is gathering pace. The financial institution also surprised in the first quarter with a profit that was well above expectations. Many investors are now wondering when the bank will be able to pay out surpluses to shareholders again.

Commerzbank's hardcore capital ratio recently rose to 13.4%, 140 basis points above the management target of 12%. If it goes by the minimum requirement of the supervisory authority, the financial institution must hold more than 9.6% capital. But precisely because of the consequences of the pandemic, the bank needs a buffer in case the provisions of EUR 1 billion for bad loans are not enough.

In brokerage, things are now also going well again with many new "home office" customers. The SME segment also seems to be able to cushion the rolling wave of insolvencies well. The Commerzbank share has quickly moved out of the EUR 5 region and is heading for EUR 8. In May alone, the share gained 30%. One should take a closer look at the CBK share again.

wallstreet:online AG - Analogies to the Trade Republic

The wallstreet:online Group with its 200 employees is no longer a pure financial information company. In the last 10 years, the Company has undergone a fundamental transformation, accelerated by the founding of the Neobroker Smartbroker. Most recently, there has been a hefty investment in digitalization and modernization. Today, in addition to the well-known platforms wallstreet-online.de, boersenNews.de, FinanzNachrichten.de and ARIVA.de, the Company also hosts the renowned Smart Investor, a print magazine for the advanced and critical investor.

With around 350 million page impressions, the Group is by far the biggest publisher-independent financial portal operator in the German-speaking world and the No. 1 among financial communities. In the long term, the Group's figures will be driven by the new "smart broker" business segment; the change from a pure financial community to a trade processor and portfolio holder of funds will lead to a multiplication of revenues by 2025.

From an analytical perspective, the question is the value of the smart broker business. The favorable conditions attract more customers to the new platforms, and settlement occurs via online marketplaces such as Gettex, Quotrix, Baader or LSX. Trade Republic recently raised EUR 730 million from investors, reaching an over-the-counter valuation of EUR 4 billion. The Berlin-based Neobroker has thus risen to become Germany's most valuable startup in the fintech sector. At the beginning of June, Trade Republic had around 400 employees and 1 million customers.

A broker's valuation is not based solely on the number of customers; the average volume managed and trading frequency also plays a role. With traditional brokers, one can assume that the age distribution of wealth is more likely to be an accumulation of wealth. Smartbroker would like to have more than 200,000 customers at the end of 2021, and they are largely from VW Direktbank. If Trade Republic's value were to be broken down here, this would be EUR 700 million for Smartbroker alone. However, at EUR 28, the w:o share capitalizes around EUR 400 million. From this point of view, the next doubling could be imminent.

Palantir Technologies - Growth with government contracts

Palantir is one of the hottest stocks in the consumer analytics and AI software platform space. The Palo Alto-based Company examines the content of the Internet for user traces and data characteristics. Its most lucrative contracts come from the government sector, where Palantir is consistently booked for highly sensitive jobs.

In the civilian sector, Palantir has big ambitions to disrupt the siloed ERPs and CRMs of the enterprise world through its success in the government sector. Here, it offers viable SaaS platforms, providing direct support to sales teams and channel partners for the most sensitive segments of the business.

In 2020, 125 customers used Palantir software, with the top three clients bringing in one-third of revenue. In the summer of 2020, Alex Karp offered Palantir software to the UK government to combat the COVID-19 pandemic for one British pound. At the same time, Palantir is involved in Brexit preparations with an office in London with 600 employees to improve the quality of the new customs processes in border traffic from 2021.

Palantir's stock has a capitalization of USD 46 billion, and revenue will grow from USD 1.1 billion to nearly USD 1.5 billion in 2021. While this puts growth at over 40%, it also puts the KUV at a big factor of 40. So despite months of consolidation, the stock is still costly from an analytical perspective. Wait and see!

SAP - Full steam ahead into the business cloud

The kick-off of SAP's in-house marketing event, Sapphire Now, was primarily focused on SAP's business network for companies. This year, SAP is unveiling its supply chain and cloud plans to build comprehensive business networks. It aims to help companies adjust their logistics and supply flow more quickly to economic and geopolitical changes.

In addition, the Walldorf-based software Company is giving concrete details of the expected progress in product development, which will be sold as innovations in the usual in-house style. Officially, Sapphire Now in Europe and the USA will not begin until next week. As expected, SAP's in-house trade fairs will again be held purely virtually this year because of the pandemic. However, it is a little unusual that SAP CEO Christian Klein's opening speech took place a few days earlier on Wednesday evening.

The innovations sold as "innovations" had already been presented in one form or another at earlier events, albeit perhaps more as ideas and less as products. The Group continues to fine-tune the various adjusting screws to implement the concept of an "intelligent" company on the one hand and to lure their customers to the cloud on the other.

The stock market has been expecting more "news" in recent months; the momentum from earlier times is faltering somewhat. Hopefully, SAP will not lose the international connection in important topics. Overall, the SAP share is probably still suffering from its October shock and can only slowly pick itself up again. However, from a chart perspective, a new upward trend will only establish itself from EUR 120.