27. August 2021 | 13:36 CET
LVMH, Diamcor Mining, Daimler: Enduring stocks from the luxury segment
Fancy watches, sparkling necklaces or a classy bag - in dreary times, people with money like to enjoy luxury items. Even though the Corona Crisis initially hurt the industry - after all, luxury goods are typically purchased while traveling - the sector is once again on the upswing. Asian customers, in particular, are keen to treat themselves. China's emerging middle class is so large that even large luxury companies are ringing the cash register. We take a look at three shares from the sector.
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ISIN: LVMH EO 0_3 | FR0000121014 , Diamcor Mining Inc. | CA2525312070 , DAIMLER AG NA O.N. | DE0007100000
LVMH: It is all here!
When investors think of luxury, LVMH usually comes to mind. This train of thought is also very obvious - after all, the Company stands for Louis Vuitton, Hennesy, Dior, Kenzo, Tiffany, TAG Heuer, Bulgari and many more. In 2021, the Company and the share benefited from good sales figures. US Americans and Asians, in particular, were willing to pay a lot for luxury. Even compared to the pre-Corona quarter of 2019, sales were up strongly. Traditionally strong at LVMH is the leather goods business. However, some time ago, the Company also landed Tiffanys, one of the most coveted jewelry brands in the world.
It is above all the extensive brand portfolio that makes LVMH so attractive. Even with luxury brands, business is cyclical. What was once fashionable loses its appeal again or comes back after a while. LVMH does not have to be afraid of this cyclicality. First, it is already well positioned, and second, it has every opportunity to buy up-and-coming brands and position them accordingly. However, after years of gains, the stock is now expensive again. Investors should remain relaxed around LVMH. The title is only interesting in the case of weakness.
Diamcor Mining: Solid diamonds with growth fantasy
A smaller company that is less known to investors, but still benefits from the luxury boom, is Diamcor Mining. The Canadians operate in South Africa in the middle of a diamond district. They are advancing their Krone-Endora project adjacent to the Venetia mine, De Beers' flagship project. In July, Diamcor sold diamonds totaling 2,989.54 carats, generating CAD 744,085 in revenue. By September, the Company plans to increase production significantly and is targeting up to 100% higher sales. In general, the Company emphasizes the excellent growth potential and points out that about 95% of the property in South Africa still has room for further exploration.
Diamcor's stock has nearly tripled in value between May and early August, which should put it on the to-do lists of many investors. While Diamcor's obvious growth appears already priced in, diamond sales and associated cash flow also provide room for further exploration. The stock may become interesting on weakness. Producers of diamonds are rare on the stock market, and Diamcor's combination of production and exploration is fundamentally interesting.
Daimler: Luxury and innovation
Daimler is a stock that can be found in many theme indexes around luxury, although it comes from a different industry. The Swabians offer high-quality vehicles for every taste. Whether it is a G-Class or S-Class or even a Maybach in extra length - only a few brands in the world can hold a candle to Daimler when it comes to luxury. But what about innovative strength? While classic luxury goods thrive on brands and emotions, what counts for cars is what is "under the hood." Here, too, Daimler can score points. Topics such as electromobility and assistance systems through to autonomous driving - Daimler is nowhere near as out of the loop as it seemed a few years ago. The Swabians simply do not show things off until they are just about ready for series production. The counterexample is Tesla - the Company recently mused about manufacturing robots that they could produce themselves in the future - for a better illustration, people in robot costumes danced across the stage. Daimler is a promising stock that also has luxury spunk. Recently, however, the chart showed a top formation - some resistances lurk between EUR 70 and 80. There is no tremendous pressure to act around the share.
Luxury never runs out of steam - this is a now well-worn headline around the sector. But the phrase is true - the price of LVMH over the years speaks volumes. Currently, the LVMH share seems a bit expensive. The same is true of Daimler's share price, which has recently left the fast lane. Diamcor is a promising miner of gemstones with growth potential, and the market has already anticipated this potential. However, with a valuation of around EUR 15 million, the share does not appear too expensive.