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January 14th, 2022 | 11:06 CET

Lufthansa, wallstreet:online, Block - Shares with catch-up potential

  • Investments
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The nervousness was palpable as the US indices fell for five days in a row. Reasons for consolidation are quickly found - the Omicron variant, inflation and the fear of rising interest rates provide uncertainty for the bulls. Especially the big tech companies would suffer from an interest rate hike, and many tech stocks were already punished and investors preferred to invest in value stocks. If the interest rate hike comes, there will likely be further markdowns in the tech sector. Today, we look at three companies that we believe could be on the verge of a turnaround.

time to read: 4 minutes | Author: Armin Schulz
ISIN: LUFTHANSA AG VNA O.N. | DE0008232125 , WALLSTREET:ONLINE INH ON | DE000A2GS609 , Block Inc. | US8522341036

Table of contents:

    Jared Scharf, CEO, Desert Gold Ventures Inc.
    "[...] We have built one of the largest land packages of any non-producer in the belt at over 440 and have made more than 25 gold discoveries on the property to date with 5 of these discoveries totaling about 1.1 million ounces of gold resources. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.

    Full interview


    Lufthansa - Battle for slots

    Airlines like Lufthansa are one of the big losers of the Corona Crisis. Accordingly, the share price has fallen sharply. Already it can be seen that the hope for an end of the pandemic through an Omicron contagion gives the paper an immediate boost. Spain slowly wants to return to normality and plans to treat Corona like the flu. Germany is still cautious, but hospitalization rates are barely changing despite high infection rates. The situation should calm down again in the spring, and if many people recover, Lufthansa could see good summer business.

    While the Corona situation may be slowly improving, the battle for slots, i.e. take-off and landing times at airports, is becoming increasingly acrimonious. The Company has reported around 18,000 empty flights and complained that this would have a negative impact on the environment. The EU had already reduced flight volumes, but that is not enough due to the many corona-related flight cancellations. Now Michael O'Lear, the head of Ryanair, has spoken disparagingly of Lufthansa, accusing it of crocodile tears. His proposed solution would be to sell customers cheap tickets to fill the planes. It is clear that Ryanair itself would like to have some of the Lufthansa slots, and the attack will ultimately come to nothing.

    As soon as the Corona situation improves, experts expect that cargo flights and business travel will be the first to pick up noticeably. The Company presented its first customer, Lenovo, which has 20 tons of freight transported from Shanghai to Frankfurt every week. These positive prospects have already caused the share price to jump, and the downward trend has been broken. Currently, the share is trading at EUR 7.10. Recently, several analysts had raised their estimates significantly upwards.

    wallstreet:online - Expands business areas

    If you compare wallstreet:online (w:o) with its competitors, you can see from the market capitalization that the share is undervalued. The Company currently has a market capitalization of EUR 305 million and is thus well behind Trade Republic and some other neo-brokers. At the same time, w:o offers significantly more than its competitors. Smartbroker is already the leader in assets under management, with significantly more trading venues offered and a sizeable financial community spread across four portals.

    The last point, in particular, will become even more important in the future because we can already see in other industries that social media and influencers ensure significantly higher sales figures. In terms of Smartbroker, that means more trades. In addition to the app, which is scheduled to launch in the first half of 2022, w:o is building a trading editorial team, as announced on January 7. It is intended to bring trading-specific content closer to consumers through texts and videos. In the future, there will also be paid content services, which are intended to tap into new customer groups. The dovetailing of broker and financial portal is thus being given a new facet.

    The Company still awaits the license it applied for in July 2021 in order to be licensed as a securities institution. Once the license is granted, the Company can work even harder on the interaction between the financial community and Smartbroker. Warburg Research and GBC analysts see a target price of EUR 34.00 and EUR 37.70, respectively. The share is currently trading at just EUR 20.30, close to the support area of EUR 19.50. If the mark holds, a test of EUR 25.40 is likely.

    Block - Hangs on bitcoin

    You can never please investors. First, they wanted Jack Dorsey to focus on one project. No sooner did he say goodbye to Twitter to focus entirely on Square than the stock starts to fall. This downward trend continues to this day, and even though Square has since renamed itself Block to focus more on the blockchain and thus cryptocurrencies. Dorsey sees Bitcoin as a currency of the Internet. He believes in it, which can be seen in the Bitcoin acquisitions in the past 15 months.

    One advantage of bitcoin is its scarcity. There will be a maximum of 21 million Bitcoins, minus the lost coins on some ledgers to which there is no longer a password. Already today, Block's customers can trade bitcoins using the app "Cash App" and thus transfer money provided that the counterparty also has the app. In the last quarter, bitcoin trading brought the Company a profit of USD 42 million. It is still very little compared to the total profit of USD 1.1 billion, but the growth since the app's launch is impressive.

    To better secure cryptocurrencies, the Company is developing a hardware wallet. Additionally, it is working on tbDEX, a blockchain that will simplify the exchange of fiat money and cryptocurrencies. Metaverse will also play a role in Block's future. The stock has fallen since November, also due to the fallen bitcoin price. Bitcoin has been in decline since November 10, falling from USD 69,355 to below USD 40,000. If you believe in cryptocurrencies, Block is the place to be. As soon as Bitcoin picks up again, Block will rise too.

    All three companies have the potential for significantly higher prices. The most volatile is certainly the Block share, which moves similarly to Bitcoin. In second place is wallstreet:online, but it carries significantly less risk than Block. Lufthansa only remains in third place, as it is still unknown whether the pandemic will really come to an end.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

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