September 15th, 2021 | 10:39 CEST
Deutsche Bank, BIGG Digital Assets, Commerzbank: Let the money work for you
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Deutsche Bank and the flight to the front
Deutsche Bank's share price has risen well by its standards in the last five days - by as much as 3.2%. Already during the past three months, however, the picture looks different. The upward trend that started last year is losing momentum. What is the reason for this? Deutsche Bank is struggling with its legacy and the future. The former world-class financial institution is pushing ahead with digitization while at the same time trying to revive its traditional business. In investment banking, it has recently succeeded quite well. But the blue bankers want to cut back on branches - 18,000 employees are to go.
It remains to be seen to what extent the bank will maintain contact with customers with a reduced workforce. The number of branches is also to shrink by around 20% by the end of the year. That means that one of the most renowned financial institutions will disappear even from the pedestrian zones of smaller cities. Although Deutsche Bank is likely to plan to win customers digitally in the future, the competition on the web is plentiful and anything but sluggish. Deutsche Bank will have to stretch to get back on track. The stock is not attractive.
BIGG Digital Assets: Mastercard takes a bite out of the competition
What Deutsche Bank was decades ago, young companies around digital currencies are today: emerging and full of opportunities. One such Company is BIGG Digital Assets. The Company is divided into Netcoins, one of Canada's most renowned trading operators for digital currencies, and Blockchain Intelligence Group, a manufacturer of security solutions for cryptocurrencies. The latter business segment addresses large banks, regulatory authorities or even payment companies as customers, which have to deal with issues such as money laundering more and more intensively. The number of providers that can offer diverse solutions is limited. In addition to QLUE, BIGG Digital Assets' solution, there are Elliptic, Chainalysis and CipherTrace. Mastercard recently acquired the latter Company. While a purchase price has not been disclosed, industry insiders believe triple-digit millions are likely.
The latest transaction is also likely to draw renewed attention to BIGG's security business. Given a market capitalization of around EUR 190 million fully diluted, this division alone could justify the current valuation. In addition, there are around CAD 60 million in cash and notable asset holdings in cryptocurrencies. The business with the Netcoins trading platform should also not be left out. This platform has steadily increased its sales in the past quarters and contributes to the fact that the entire BIGG Company now has a positive cash flow. In addition, Netcoins has made intensive efforts to obtain a license as a regulated crypto trading venue. Should the authorities grant these plans, this would be another positive signal. Currently, there is only one regulated crypto trading venue in Canada whose operator is not listed on the stock exchange.
The BIGG Digital Assets share has had an eventful history. Within the past twelve months, the value developed from a penny stock with prices around EUR 0.10 to levels above EUR 3. This development has given many private investors the profit of a lifetime. However, the subsequent crash also caused some "burnt fingers". In the meantime, the share has returned to a region where daredevils can take a closer look at the value. The Company has a good capital base, is cash flow positive and operates in two exciting areas around new money.
Commerzbank: A business model out of time
While growth is the order of the day at BIGG Digital Assets, Commerzbank is taking care of legacy issues similarly to Deutsche Bank. Here, too, the aim is to cut costs, release employees and close branches. In the future, business will be done digitally, management believes. The Commerzbank share is also languishing and making no headway. The idea of solid investments in the traditional banking sector is becoming more and more of an outdated pipe dream.
Indeed, spontaneous price rallies are always possible with Deutsche Bank and Commerzbank, but the timing is crucial. Currently, the shares are not very interesting. However, BIGG Digital Assets is becoming more and more interesting. Although the share is in a downward trend, the valuations are currently entering an exciting range. Since cryptocurrencies have a future and BIGG is well-positioned, investors should take a sober view of the stock and analyze it based on the facts.
Conflict of interest
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