09. April 2021 | 08:25 CET
IBM, REVEZ, CLIQ Digital - Digital stocks for analog profit!
Today's world is becoming increasingly digital. Especially in times of Corona, many people realize the advantages of electronic life. School lessons for the children, ordering food and banking transactions can all be done conveniently from home. Digital communication is linking people worldwide. Every trading partner is just a mouse click away. Three things are crucial for digital transformation: infrastructure, content and people who know how it works. The following three stocks cover exactly these areas and are gold for the portfolio for other reasons too.
time to read: 4 minutes by Carsten Mainitz
IBM - One of the most important players in the field of digital transformation
Even though the IBM Group was founded more than 100 years ago, it has managed to remain at the spearhead of technological progress to this day through tremendous adaptivity. By concentrating on ever new business areas, from mainframe computers to office PCs to the latest cloud storage solutions, and not least through its positioning as the world's largest management consultancy (following the acquisition of the consulting business of PriceWaterhouseCoopers), the Group is today one of the main drivers in the field of digital transformation.
Whether as a system supplier for the established cloud providers Microsoft, Google and Amazon (AWS) or as a service provider for companies, such as databases or its learning AI platform Watson, IBM is a sought-after partner. And the IT battleship is not resting on its laurels but is continuing to find solutions to make the digital transformation even more efficient. Just a week ago, the Company announced that it had entered into a partnership with Munich-based software house Celonis through its subsidiary Red Hat to make digital transformation processes more efficient with Celonis' EMS (Execution Management System) software.
The software, which is installed over central enterprise software such as the ERP system, is designed to prevent inefficiencies using data mining and learning process intelligence. Investors seem to like the path IBM is taking here. The stock has already gained more than 12% since the beginning of the year. While the stock has not yet been able to recover from the Corona crash, we firmly believe it will do so in the near future. For investors, this makes the opportunity more than favorable.
REVEZ Corp. - The Singalese digital transformation specialist
In Asia, digital transformation is the order of the day for many companies in year two of the global Corona pandemic. Those who fail to address digital challenges will soon have no way to address any challenges. Yet, the process of digital transformation encompasses many different areas.
There are usually specialized solution providers for each area: Web Content, Cloud Service, Applications-as-a-Service are just a few examples. Digital transformation means including and networking all these aspects, and this is precisely where many companies fail. The new digital strategy is often not fully developed, inefficient, and leads to high costs or insolvency in extreme cases. Here is where the Singalese Company REVEZ comes in. The Company, which has been listed since 2019 through a reverse IPO, offers its solution called "REVEZ Hub," an association of different companies focused on different subareas of digital transformation under central control, specifically for the local Asian market.
Customers thus no longer have to coordinate their activities; the process is implemented more quickly in all subareas. In addition to the omnipresent topic of cybersecurity, the fields covered by the REVEZ Hub also include the sub-areas of information and communications technology, artificial intelligence, industrial automation and the Internet of Things (IoT).
The Company, which describes itself as a CreativeTech Company, was already able to turn over the equivalent of EUR 4.15 million in 2020. This was about 18% more than in the previous year. With a market capitalization of around EUR 25 million and a P/E ratio of just under 6, the entry opportunity currently appears favorable. We are convinced that the Company will score with its comprehensive one-stop service on the market and good share performance.
CLIQ Digital - From ringtone provider to digital content provider
Founded in 2005 under the name Bob Mobile and renamed CLIQ Digital in 2012, the Company has had an eventful history. Initially started as a provider of cell phone content such as ring tones and not enjoying the very best reputation due to dubious subscription practices and slightly disturbing offers, the Company has in the meantime molted into an established, globally active streaming entertainment provider.
The Company, which was co-founded and managed for many years by the current gamigo CEO, Remco Westermann, was recently able to present very impressive figures. In 2020, revenues rose by 69% to EUR 102 million, while EBITDA even increased by 177% to EUR 15.9 million. At EUR 10.4 million, net income was 168% higher than in the previous year, corresponding to earnings per share of EUR 1.16. The Company will disclose this figure at the Annual General Meeting. Of this amount, the Company will propose a dividend of EUR 0.46 for distribution at the Annual General Meeting on April 29. For 2021, the Group's management is forecasting gross sales of at least EUR 140 million with EBITDA of around EUR 22 million. This would correspond to an EBITDA margin of 16%.
Given such figures and an equity ratio of over 77%, it is not surprising that CLIQ Digital has become a stock market darling in the last 12 months, with the share price already increasing ninefold. Nevertheless, the end of the line does not seem to have been reached yet, given the rosy growth prospects. If the Company achieves the targets it has set itself this year, the share is still very attractively valued despite a 2021 P/E of over 20.