24. February 2021 | 08:45 CET
Home Depot, RYU Apparel, Lufthansa - Is the bubble bursting now?
It seems as if Allianz CEO Oliver Bäte gave the starting signal for a sharp correction in technology stocks as well as for cryptocurrencies over the weekend. The Group CEO expressed concern about the issue of financial market stability. He said the situation, especially in the stock markets, resembles the situation before the crash of 2008 and the crash of 2000. Stock market legend Jim Cramer also said on Monday that investors should swap expensive tech companies for cheaper, traditional companies that ride the wave of economic recovery. We will see if the current correction heralds a longer trend.
time to read: 3 minutes by Stefan Feulner
RYU Apparel - The Billion Dollar Company
The stock market value of the award-winning Canadian fashion label RYU Apparel is currently the equivalent of EUR 19.45 million. The goal of CEO Fazari, who has been in charge since March, is to turn the urban sportswear and accessories brand RYU into a billion-dollar company by 2030. Impossible? Not really. Take a closer look at the CV of the serial founder. You will see several companies with valuations in the billions in the real estate, biotechnology and fintech sectors that he successfully led to their goal. To achieve this admittedly ambitious goal, Fazari turned the Company around fundamentally. In total, the Company raised about CAD 6 million in working capital in several rounds of placements. "Respect Your Universe," the impressive Company name, is to create a symbiosis of the three areas of life - fashion, sports and lifestyle, in the future. The unique selling proposition is expected to give the Company significant leverage over the average sporting goods industry.
The up-and-coming Company has already taken another critical step. By investing in its online stores, online sales now account for 80% of total revenues. The brand is to be pushed above all by cooperation in the enjoyable trend sports. RYU Apparel will be equipping the Canadian national skateboarding team with innovative high-performance sportswear and bags as an official partner until at least 2023. In the Golf division, well-known personalities were brought on board to make the brand even more authentic. In addition, RYU Apparel is focusing on product placements in famous films and series as well as influencer marketing. Last week, the position was filled for this high-caliber role. Stefanie Crosby, an expert in cross-border mergers and acquisitions and influencer marketing, joins the Board of Directors.
Another critical success factor is the expansion outside Canada. Just Monday, the news ran across the ticker that a wholesale distribution agreement had been reached with Grupo Pavel, Mexico's leading distributor. Overall, it is impressive what the new management has accomplished in this short time. The share price of RYU Apparel, which is traded in Toronto on its home exchange and Germany, currently stands at CAD 0.19 or the equivalent of EUR 0.12. Have a closer look at these companies.
Home Depot - The Lockdown Home Depot
Enormously benefiting from the home improvement activities during the lockdowns lasting several weeks was the US home improvement chain Home Depot. The extreme demand for home improvement supplies caused sales and profits to explode. In fiscal 2020/21, which ended at the end of January, revenues rose by almost a fifth to around USD 132 billion. Overall, Home Depot earned about USD 12.9 billion, 14.4% more than in the same period last year. The fourth quarter was once again solid.
Here, revenues were USD 32.3 billion. Net income reached USD 2.9 billion, up from USD 2.5 billion in 2019. The quarterly dividend is expected to increase 10% to USD 1.65 per share, resulting in a USD 6.60 per share payout. For the new year, management remained cautious in light of uncertainties about how the pandemic will unfold and impact consumers. As such, the Company did not provide guidance for the new fiscal year.
Lufthansa - ready for takeoff
The travel and airline industries are undoubtedly among the most affected by the Corona pandemic. After almost a year of suffering, there is hope due to the vaccination programs' positive developments. British Prime Minister Boris Johnson said that the British government intends to lift all pandemic restrictions step by step by the end of June, provided, of course, that Corona case numbers remain low.
In an interview last week, Lufthansa's CEO was less euphoric. He said there would be very weak passenger numbers in the coming weeks, and even from the summer, he expected only 40 to 60% of the pre-crisis level. He said this range alone means a major operational challenge for his Company regarding staff and jet deployment planning. Lufthansa shares rose more than 4% in yesterday's trading to EUR 11.80, representing a gain of more than 70% from last year's low. Therefore, a great deal of easing fantasy is already priced in.