December 9th, 2021 | 05:01 CET
LVMH, Diamcor Mining, Porsche: Luxury as a safe bank
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
LVMH: Everything is in here
A basic investment when it comes to luxury is LVMH. The Paris-based conglomerate stands for 75 strong brands, including Moet & Chandon, Veuve Cliquot, Louis Vuitton, Loewe, Dior, Tiffany, Bulgari and many more. The best thing about LVMH's concept is that the group always has a brand in its portfolio that is doing well at any given time. During the early phase of the pandemic, LVMH also lost ground, as many luxury goods are still brought back from travel, but the business has since recovered.
Business with Asian customers has long played a decisive role for companies like LVMH. More and more wealthy people live in Asia, and the middle class can treat itself to something - more than ever before. Growth figures from the International Monetary Fund (IMF) show that the emerging markets of Asia are one of the few regions in the world to have come through 2020 smoothly and are already growing strongly again in 2021. Stocks like LVMH remain an attractive underlying investment in the luxury sector.
Diamcor Mining: Diamonds make friends
An exciting niche within the luxury segment is diamonds. Diamcor Mining started successfully into 2021 and put an impressive return on the floor. Recently, however, the share price has come back a bit. Diamcor mines rough diamonds in South Africa and supplies the global market. Another customer is Tiffany & Co. Canada, a company belonging to the LVMH Group. The Krone-Endora project is considered low-cost due to its geological conditions. Next door is the well-known Venetia mine, considered the most productive mine in South Africa.
Diamcor consistently holds sales auctions, most recently achieving an averaged sales price of CAD 226.64 per carat. Thanks to established customer relationships, such as Koin International, which has sales offices in Dubai, Diamcor can always bring its products to customers at current market prices. Particularly against rising inflation, tangible assets are likely to become more attractive. As concerns about the pandemic have repeatedly led to production cutbacks in recent quarters, the stock has recently fallen back. However, Diamcor itself believes it is well-positioned to meet these challenges due to cost reductions. The share is dynamic and speculative, but the business is promising.
When will Porsche put the pedal to the metal?
Porsche's business is also promising. The sports car manufacturer is one of the most respected global brands that Germany has produced. That is probably one of the reasons why there are currently media reports that Volkswagen's majority shareholder, the Piëch family, wants to sell shares in the Wolfsburg company to acquire shares in Porsche in return. The two companies have been closely linked for years. The Piëch family intends to remain the majority shareholder there even after the sale of VW shares. VW wants to invest the funds from the share sale in future technology and digitization. Porsche is also likely to benefit indirectly from this. So, on the one hand, the Piëch family should expand its influence at Porsche and at the same time release indirect investments in Porsche.
Porsche is not an icon with an undoubted reputation for nothing. The brand will continue to be in demand from customers all over the world for many years to come. Although the share reacted positively to the latest news, a slight loss has been recorded on a three-month horizon. The stock will move into the fast lane above the EUR 93.50 mark, and Porsche will likely put the pedal to the metal as soon as the price reaches triple digits.
Luxury always runs. This truism also applies to LVMH, Porsche and Diamcor. While the first two companies have long been top dogs, Diamcor Mining combines a commitment to the luxury segment with growth and dynamism. For certain groups of investors, this can be just the right mix.
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