02. June 2021 | 11:05 CET
Heidelberger Druck, Steinhoff, Adler Modemärkte, RYU Apparel - These penny stocks are exploding!
Whenever the stock market marks another high, investors think about which stocks might be "left behind." Sure, there are undervalued stocks, yet the market usually has good reasons why stocks are trading low or even in the penny stock range. Often, these are stocks that have reported very low figures or operate an uncompetitive business model. While DAX stocks were able to climb to new highs again yesterday, some stocks still lag or show interesting special movements. We take a closer look at a few stocks that fluctuated strongly.
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Heidelberger Druck - Wallboxes ensure rising turnover
Wiesloch-based Heidelberger Druckmaschinen AG is benefiting from the trend towards e-mobility. Demand for wallboxes - charging systems for electric and hybrid cars - has been rising sharply since the beginning of the year, and the revenue contribution in this segment is growing steadily. Overall, the high demand for charging tools is causing sales at Heidelberger Druck to leap, from EUR 10 million in 2019/20 to over EUR 20 million in the financial year 2020/21. Heidelberg has now sold 45,000 wallboxes since 2018, and orders are increasing by a double-digit percentage every month.
The business is now to be significantly expanded and transferred to a separate subsidiary. The products are currently manufactured in three-shift operations by around 100 employees. By the end of the year, the production lines are to be doubled from two to four. There is currently a shortage of employees because the Group had just completed a restructuring program. However, considerably more personnel are now to be deployed in this area - just how quickly the market can undo strategic decisions.
Total sales in 2020/21 exceeded forecasts at EUR 1.91 billion due to a strong 4th quarter. With an order backlog of EUR 636 million, the Company considers itself well equipped for the current fiscal year. In May, the share price jumped by more than 50% to currently EUR 1.88. The Company is thus not outperforming the market. Overall, the Company is not out of the woods, but its penny-stock existence is over.
Steinhoff International - Light at the end of the tunnel
Steinhoff is once again calculating with a sharp pencil. Steinhoff Holding would like to pay 50% of the proposed settlement of the approximately EUR 8-10 billion in disputed claims in the form of Pepkor shares. In addition, a further EUR 500 million or so would be paid in cash at the end of the settlement. Of course, this will only work if the Pepkor stake is sufficiently attractive for the injured parties of the accounting scandal.
The figures now published for Pepkor Holdings Ltd. look good, as the growth figures presented are correct despite the Corona pandemic. With the fintech arm, they make about 10% of total revenue and have high growth rates. In the highly volatile South African retail market, the Company even succeeded in taking some market share away from the competition. The debt burden was reduced by around ZAR 8 billion to ZAR 6.4 billion through a bond issue and a capital increase at the end of the quarter. Operating profit rose by 18.5% to ZAR 4.6 billion. It remains to be seen whether Pepkor's good numbers will be enough to put the settlement creditors in a positive mood. The Steinhoff share price has long been a plaything of speculation.
Adler Modemärkte - Rescue from insolvency?
Adler, the fashion chain based in Haibach near Aschaffenburg, is to receive a government loan of EUR 10 million. Investors' hearts are beating faster because the loan increases the chances of a successful settlement of the insolvency proceedings currently underway. In May, the fashion chain had turned to the public because EUR 10 million was missing for a smooth insolvency. Adler is now to receive precisely this sum in the form of a state loan.
This was confirmed to Bayerischer Rundfunk by the CSU member of parliament for Aschaffenburg, Andrea Lindholz. The amount will be provided by the Economic Stabilization Fund (WSF). Adler himself was surprised that this news has come to the public. According to information from Haibach, Adler is in talks with investors shortly before the insolvency is completed, and the capital injection could perhaps save many of the 3,200 jobs.
In 2 days, the Adler Mode share jumped by more than 200% upwards, but since probably not everything is in the clear yet, speculators should set tight stops here. But the probability of a good outcome of the insolvency proceedings has increased. In the event of a possible reorganization, the share is likely to experience a capital cut still.
RYU Apparel - Turnaround in the share price without new announcements
It has become quiet around the Canadian fashion retailer RYU Apparel. The share price moved insidiously from CAD 0.26 in February to below CAD 0.10 in May. The Corona pandemic has left its mark on the figures; after all, no flagship stores were able to open for many months.
In April, the Company conducted an extensive marketing campaign. As a result, RYU quickly built up a complete fan base in the 14 to 40-year-old segment. These are the consumer-loving class who have reasonable budgets and are also accessible through all marketing channels.
According to market forecasts by Oakridge Financial, RYU has now established modern corporate structures after its tough restructuring in 2020, and the addressable market will grow to about USD 210 billion in 2025. The Company has announced numerous synergistic partnerships to expand brand awareness. Onboard are Zoom Media, BEI and the Olympic skateboarding team for Canada at the upcoming Tokyo Games. RYU expects to continue strengthening its brand through more partnerships in the future, focusing on trendy and unique designs.
Recently appointed Chief Operational Officer Rob Blair brings nearly two decades of experience building high-growth, iconic apparel and sportswear brands to the RYU team. There is still a lot to look forward to here, which will surely give the stock another big push higher. Yesterday, the stock rose over 30% on good volume - if there isn't something up. The RYU share is also traded in Germany - please only act with a limit.