25. January 2021 | 07:30 CET
FlatexDEGIRO, Adyen, Marble Financial: A comparison of 3 growth stories
Digitization is bringing with its numerous innovations, especially in the financial industry. Costs are falling and more and more services can be implemented in a digitally customer-friendly way. Examples include crowdlending platforms and digital insurance folders, which primarily offer customers transparency. Traditional financial institutions have also long since recognized that they can no longer do without an app. Nevertheless, there are still niches in which young and innovative companies are gaining market share and generating returns for investors along the way. We present three exciting investment stories.
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ISIN: CA5660551097 , DE000FTG1111 , NL0012969182
FlatexDEGIRO: Online broker on its own growth path
FlatexDEGIRO is an online broker that has been on an ambitious growth path for years. At the beginning of 2020, Flatex took over the price breakers of DEGIRO and have thus broadened their growth base. There has been a trend towards low-cost smartphone brokers for several years now. While wallstreet:online wants to keep up with the young guns from Trade Republic, Justtrade or Scalable Capital with its Smartbroker, FlatexDEGIRO increased its fees only some time ago and, among other things, introduced a custody fee based on the market value of the securities held in custody.
In times of the general stock market boom, many customers seem to be indifferent to the higher fees - for now. But a stormier market environment could cause cost-sensitive customers to cut costs. So far, however, there has been little sign of this. Since DEGIRO was only acquired last year, the Company could still benefit from synergy effects in 2021, while some acquisition-related costs should gradually decrease. FlatexDEGIRO is a growth stock not only because of the completed acquisition of DEGIRO.
At the end of last year, the Franks had 1.25 million customers. In 2025, it should be 3.0 million. This growth perspective is currently also reflected in the valuation. But compared to other brokers, FlatexDEGIRO shines with a very high activity rate of its customers. Those who have their securities account with FlatexDEGIRO usually trade more than other private investors. At least in part, this justifies the ambitious valuation. However, given a return of 159% in one year and the Franks' self-confident fee model, the upside potential seems limited.
Adyen: Payment processor steps out of Wirecard's shadow
Adyen's stock has seen similarly rapid growth over the past year. The Dutch Company followed Wirecard's footsteps as a payment processor and generated a return of 143% over a twelve-month period. After Wirecard disappeared from the market, Adyen's transaction volume increased significantly - in the first half of 2020 alone, it went up by more than 20%. Although Adyen suffered from the first lockdowns in March 2020, as many in-store payment transactions fell away, the Company compensated for this with increased sales in online commerce. Here, Adyen sees the most potential and is investing heavily in new capacity and solutions.
Although Adyen is considered a young startup, the Company is profitable and operates in a growth area. Technologically, the Company is a leader and can also translate this advantage into growth. The share is in a robust upward trend. Despite the already ambitious valuation, investors can add the stock to their watchlist. If Adyen follows suit with good figures, the positive development can continue for a long time.
Marble Financial: Data fintech helps over-indebted consumers
The young Canadian fintech Marble Financial is also at the beginning of its development. Marble has made it its mission to support consumers around the topic of loans and financing. As the Company points out, around twelve million people in Canada alone are not sufficiently creditworthy and are therefore outside the financial system. However, many people are dependent on loans and scramble from credit to credit.
The reasons for this are likely a low level of financial education and poor credit ratings, which also exist in Canada, similar to the German Schufa. ScoreUp, one of Marble Financial's products, starts precisely here and supports people in improving their creditworthiness. It uses machine learning and big data analysis to give customers specific tips on how to improve their score. Examples might be how to use a credit card or how to conclude and repay an installment contract at the right time.
Marble's other products include Fast Track, a program that helps people in personal bankruptcy become part of the financial system again and Maestro, an eLearning offering around budgeting, credit and managing money properly. Over the year, Marble Financial plans to launch additional products. These include a credit card in cooperation with a large Canadian bank and an analysis tool to assess a person's financial situation. In addition to providing concrete help for over-indebted people, the Canadians repeatedly emphasize the importance of the data collected in their activities.
The share price also rose significantly in recent days in the wake of an acquisition announced by Marble. On January 18, the Company announced plans to acquire data specialist Inverite Verification Inc. Given the full product pipeline and the exciting field of activity, the Company's shares, currently valued at only around CAD 20 million, are a clear case for the watch list.