09. February 2021 | 08:30 CET
Heidelberger Druckmaschinen, Fokus Mining, Baumot Group - once a penny stock, always a penny stock?
In the following, we present three shares currently trading below the EUR 1 mark or have been trading below this mark for some time. But nothing is forever. When the good news hits and business is going in the right direction, prices and valuations can quickly find themselves at a different level. Where is the most significant potential?
time to read: 2 minutes by Carsten Mainitz
HEIDELBERGER DRUCKMASCHINEN AG - positive newsflow is rewarded
For almost the whole of last year, the Company was trading below the EUR 1 mark. The Heidelberg Company has a long corporate tradition of 170 years. Nevertheless, the importance of traditional printing is declining in the digital world. Although the Group has a market share of over 40% for sheetfed offset presses and has been able to consolidate its position as the market and technology leader in the printing industry, it struggles with falling margins and made a considerable loss in the past financial year.
The Company has by no means ignored the signs of the times, but the transformation process and the broader positioning have taken more time than planned. In recent weeks, the Group has published several positive news items that have gone down well with investors. At the end of last year, the Group announced that it expected dynamic growth in the Wallbox sector. With the Heidelberg Wallbox Energy Control, the Group offers charging solutions for electric vehicles. At the end of January, the Heidellberg-based Company spoke of a planned doubling of production.
Last week, the Company announced that it would be divesting the Print Media Academy, including its real estate, and had signed a purchase agreement with a Luxembourg-based investment company. The price is in the low double-digit million range and will strengthen the Group's liquidity. With the good news, the share price managed to jump above EUR 1 after a long dry spell. Analyst comments are also slowly becoming more positive again.
FOKUS MINING CORPORATION - investing with foresight
Last week, Jean Rainville, CEO of Fokus Mining, announced that they would soon receive results from test drilling done in 2020. Based on these results, the Company will modify its current drilling program and prioritize high potential zones.
The Canadian exploration Company is in the process of advancing the 2,668-hectare Galloway project in the province of Quebec through a 40,000-meter drill program. In recent months, the Company has raised sufficient funds for this project.
The current company valuation of CAD 17 million leaves ample room for upside. In general, gold price increases have a positive impact. However, in our opinion, the drilling data, in particular, will provide price impetus. The size of the project and the Cadillac-Larder Lake fault location, which has hosted large production volumes of gold in the past, are favorable characteristics. Those with a little patience should be rewarded in the near future.
BAUMOT GROUP AG - bitter hour
After more than 25 years on the market, Baumot Group had to file for insolvency in self-administration in January. With its products and services, the clean mobility provider made it possible to technically upgrade vehicle fleets to meet legal requirements for emission limits.
The step of filing for insolvency was triggered by the large drop in sales in the core markets of Israel, the UK, Italy, and Germany due to the Corona pandemic and the renewed lock-down. The Company's clear objective is to turn around and continue the business and achieve profitability.
The stock is currently trading in the EUR 0.25 range, valuing the Company just under EUR 23 million. It is still too early to say how the exhaust gas aftertreatment expert's chances of survival are to be classified.