November 13th, 2020 | 12:48 CET
EXMceuticals, KWS Saat, Nokia: Talk about crashes and comebacks
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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.
EXMceuticals: Cannabis Play is about to start in Europe
More than a year ago, the Company focused on the cultivation and production of cannabis in Africa. Now, EXMceuticals has set its sights on a regulated market and operates in Portugal. Here, the Company has a processing plant for the extraction of active ingredients from cannabis plants. The focus here is on medical applications. EXMceuticals is confident that future growth will not be in the area of pure raw materials but in processed products. However, to produce pastilles, creams or even cookies, it must be possible to supply them with the desired active ingredient in exact doses. This requires the prior processing of the raw material, cannabis.
In Germany, medical cannabis has been liberalized since 2017. Other European countries also tolerate private use as a luxury food. EXMceuticals considers itself well-positioned in case of further market liberalization in Europe and emphasizes its focus on the processing of cannabis. While pure cultivation is not a challenge, the extraction of the active ingredients is essential. Here the Company scores with a certified processing plant according to pharmacological standards.
Furthermore, the Company already has agreements with European companies to be able to start the activities quickly. Currently, EXMceuticals is waiting for credit approval from Portuguese banks to be able to advance the business further. Other Portuguese investors have already shown interest. The share currently seems to be at rock bottom, but further liberalization trends within the less competitive European cannabis market, as well as additional financing commitments, could revive the speculative value.
After a rollercoaster ride Profiteer of climate change: KWS Saat
KWS Saat is a stock that has also seen ups and downs. More than ten years ago, when demography and the rise of more inferior population groups in emerging markets was an investment topic, many investors rushed to fertilizer and seed manufacturers. A veritable hype arose. During the financial crisis, many expectations came back, down to earth. But KWS Saat shares fought their way back up again. Today, the Company is mainly active in Europe and the USA and makes money with both cereals and vegetables. A new megatrend is also attracting shareholders: Climate change is changing cultivation conditions in many regions and even leading to failed harvests. With the help of specialized seeds, farmers can meet these challenges.
Looking ahead to the current fiscal year, the Company expects growth of between 8% and 12%. The margin should also be very respectable at 11% to 13%. With this positioning, the Company is in demand on the stock market. Although a return of only 5.8% can be achieved on a one-year horizon, the share took off in the first half of the year and made a return of more than 50% within a few weeks. The dividend also shows that the value is a solid investment, with the dividend yield at around 1%.
Nokia: With luck, the 5G hype is entirely on target
Nokia also shows that a crash on the stock market does not have to be the end. For more than a decade, the Finnish Company was the best-known cell phone manufacturer in the world. But then came the iPhone and then the Android smartphones. The Finns missed this train, and the stock even staggered into the range around one Euro. But with the sale of the cell phone division, the Company succeeded in making a liberating move. Nokia is now a network supplier. Although there are always critical voices because the competition from China is cheaper, trade wars and protectionism could lead to Chinese manufacturers being left out in Europe and the USA in connection with 5G technology, as has already happened in some cases. The Company has achieved a turnaround and even boasts a good equity ratio. With a bit of luck, the 5G boom will have a full impact on Nokia's business.
Fallen angels offer chances
The history of the stock market is full of setbacks of former favourites and subsequent recoveries. Sometimes it even takes a while until the market rediscovers these fallen angels. For shareholders who look closely, this can be an opportunity. But sometimes, as a shareholder, you also need patience. Shares that have already been through a hype often find it incredibly challenging to get back on the market.
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