19. February 2021 | 09:30 CET
Meyer Burger Technology AG, Relay Medical Corp., Pollux Properties Ltd. - Watch out: These shares from the "penny lane" have excellent upside potential!
What does a hairdresser who collects photos of his customers, a banker who doesn't wear a raincoat even in the pouring rain, and a pretty nurse selling poppies have in common? That's right, according to a Beatles classic published in 1967, they all live in what is probably Liverpool's most famous street - Penny Lane. In terms of share price, this also includes the shares of the Swiss Company Meyer Burger Technology AG (solar technology), the Canadian Company Relay Medical Corp. (healthcare) and the Singalese real estate Company Pollux Properties Ltd. But for how much longer?
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ISIN: CH0108503795 , CA75943L1058 , SG1I77884290
Meyer Burger Technology AG - Surprising buy recommendation of the US investment bank Jefferies boosts the share price
Meyer Burger Technologies Ltd is a solar supplier based in Gwatt, Switzerland, in Bern's canton. Previously specializing in innovative systems and production equipment along the value chain for solar modules, the globally active group had recently announced its intention to enter solar module production itself with its proprietary Heterojunction/SmartWire technology. The background to this is the significantly improved efficiency and yield compared with the PERC technology previously used in production and other heterojunction modules currently available.
Production is to be set up at the Company's two new German sites in Bitterfeld-Wolfen and Freiberg. The Company had received a funding commitment of EUR 7.5 million from the state of Saxony-Anhalt for the development. The announcement initially caused astonishment in the industry due to the enormous risks of setting up a new production facility in a high-wage country such as Germany. Still, after an analysis, the US investment bank Jefferies also concludes that even if the worst-case scenario were to occur (sales of CHF 400 million, EBITDA margin of 25%), the share price is currently trading at a discount of around 40% compared with comparable solar module producers. And this even though the share has already gained about 27% since the beginning of the year.
In the best-case scenario (sales of CHF 450 million, EBITDA margin of 30%), analysts even consider a price of around 92 centimes or EUR 0.85 possible. Investors who firmly believe in the energy turnaround currently still have the opportunity to jump on this potential doubling bandwagon.
Pollux Properties Ltd. - Lots of potential, even without "Castor"
A little excursion: Pollux in the constellation Gemini is together with its "brother" Castor, one of the brightest bodies in our night sky. But the star, which is one of the red giants, has already passed its prime. It has already burned all the hydrogen in its core to form helium. Fortunately, Pollux has so much mass that it can now fuse its helium into carbon, which will give it another few million years of life. The situation is similar in the showcase city-state of Singapore: here, too, virtually all the building land has now been "burned up," i.e., built on.
But this is precisely why the real estate market in this booming metropolis is on a continuous upward trend. Price increases have averaged around 13% p.a. over the last five years. Fortunately, real estate developer and portfolio holder Pollux Properties can draw on an extensive real estate portfolio of both residential and office and retail space in this environment. Although the real estate development sub-segment came to a standstill in 2020, the Company was still able to increase its sales by 6% to SGD 15 million using the existing properties and the third pillar, fund management, despite Corona. In fund management, the Company expects a substantial increase in assets under management, which is currently still around SGD 10 million.
The Company, which is currently capitalized at around EUR 69 million, is sitting on a cash position equivalent to around EUR 7.2 million, with a price-to-book ratio of just 0.56. Value investors, in particular, should therefore take a very close look at this stock. The Pollux share offers a favorable entry opportunity to profit from the ongoing Singapore boom.
Relay Medical Corp. - Out of the price slump thanks to Corona?
While most industries are groaning under the effects of the global Corona pandemic, shares of Canadian Company Relay Medical Corp. owe them their rapid climb out of the share price cellar. Founded in 2014 under the name ChroMedX, the MedTech manufacturer's shares had been languishing below a price of CAD 0.30 for more than two years. The announcement of the development of a mobile COVID-19 rapid test device and the construction of a test platform in cooperation with Fio Corporation and its licensing to the North American government agency USAID initially sent investors into raptures.
The next kick came with the announcement of a successfully completed randomized, double-blind Phase II clinical trial of a COVID-19 therapy called ArtemiC™, developed by Relay's subsidiary Glow LifeTech in collaboration with Swiss PharmaCan AG and Australia's MGC Pharmaceuticals Ltd. The product, manufactured using a technology called MyCell™, statistically significantly increased the recovery of COVID-19 patients in the treatment group compared to a placebo group. Glow LifeTech, which holds exclusive rights to this technology for the US, Canada and Mexico, has now also secured exclusive sales and distribution rights for the therapy in the North American and Caribbean markets. The Phase III clinical trial with a subject number of at least 250 is expected to start shortly in Brazil.
Should this Phase III trial confirm the results of the Phase II study, this should have an extremely positive effect on Relay's share price. The share, which has more than doubled in value since the beginning of the year, still offers a good investment opportunity for courageous investors.