01. February 2021 | 07:30 CET
Nokia, Pollux Properties, AMC Entertainment, B-A-L Germany: Long or Short?
What a week it was! Stock market history was effectively rewritten. Crowds of investors banded together on social media channels and declared war on the established Wall Street Gurus. The chase of the little guys against the big guys started with some stocks on the NYSE. These stocks had poor numbers due to the Covid-19 pandemic and therefore tended to trade on the short side with hedge funds. That called out the Robinhood community. They buy the shares at any price, forcing the big players in parallel to overpriced, even panic-stricken buying. The result: A stock like GameStop gained around 1,600% in one month. Shares that were quoted at an average of USD 15 in December are now only available beyond USD 300.
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ISIN: SG1I77884290 , FI0009000681 , US00165C1045 , DE000A2NBN90
Nokia - Together with Google in the matter of 5G
Nokia was also one of the wow stocks last week. Within 5 hours on Monday, it went from EUR 3.5 to EUR 4.5 while the home stock exchange was still closed for a holiday. On Wednesday, due to ongoing social media campaigns, a price of EUR 6.5 was reached, which was then an almost 80% price increase within 48 hours. The STOXX all Europe 100 stock reacted with a message that nothing relevant had happened at the Company. The community then let the stock fall again and the price ended up at around EUR 3.80 on Friday. According to data provider Ortex, hedge fund losses total more than USD 70 billion last week - which could put central banks and regulators on alert.
Nokia itself has been going through a repositioning for the past 5 years. The fundamentals are getting better and better and they also want to pay out a dividend again for 2020. The Company is at the forefront of 5G technology and recently announced a significant cooperation with Google. The Finnish network supplier wants to develop innovative 5G solutions for corporate customers together with Google's Cloud division. While Nokia will contribute its 5G expertise, Google Cloud will provide the platform for new applications and help customers build their 5G-enabled services. The first solutions in virtual reality, autonomous driving and Industry 4.0 applications are expected to be ready by the end of the year. In our opinion, despite the recent roller coaster ride, the Nokia share remains attractive in the medium term.
Pollux Properties - Land is scarce in Singapore
The city-state of Singapore is a major Asian city with the most Western of characteristics. Clean, safe and highly-priced compared to the rest of Asia, it offers a living of the highest standard. The Asian metropolis is only 725 square kilometers, but the population density is relatively high, with 5.8 million inhabitants. No wonder that real estate prices have been rising for years and building land is becoming increasingly scarce. With a GDP of USD 364 billion, Singapore ranks 35th globally, and the popular stock exchange also ensures the settlement of many international companies and quite a few financial institutions. The region is booming!
The Company Pollux Properties is a real estate developer and portfolio holder from Singapore. In an environment constrained by the pandemic, 2020 was another record year for the holding Company, with a total of 138,474 gross floor areas built and a corresponding construction volume of nearly SGD 400 million. The fund management division manages an additional SGD 16.8 million, with 7 large greenfield properties built in 2020. Construction activity in Singapore remains high, with price increases of 12.7% per annum over the last 5 years. Singapore is among the top 10 most expensive metropolitan areas for rents, behind Sidney, Dublin and Paris.
All in all, Pollux already earns SGD 9.5 million per year with a real estate investment of 11,150 sqm of residential and commercial space - and the trend is rising. Another central pillar is the fund management for institutional clients with a current volume of SGD 16.8 million. Here an increase of about SGD 20 million is expected in the next 5 years. Pollux is very well positioned for the prospering environment in Singapore and is growing steadily due to its good market expertise. Pollux shares are currently capitalized at SGD 83 million, with the share price fluctuating between SGD 0.02 and SGD 0.03. Value is still undiscovered, but sales in Frankfurt are presently increasing.
AMC Entertainment - Cinema operator makes a splash
Another candidate for airy course jumps is the cinema operator AMC Entertainment. Here, too, the Robinhood Guild would like to have identified a large short position. The conclusion is evident because cinemas, in particular, are significantly affected during the pandemic. They will find it challenging to transfer their service offerings to the online world because the mega players of the streaming industry are already dividing up the pie accordingly. The forced closures of the operations lead to compensation payments from the pandemic funds, but today it is sometimes questionable whether one can open a cinema of the current type again without any problems.
AMC Entertainment Inc. is a global operator of movie theaters. Since May 2012, American Multi-Cinema (AMC) has been 38% of the Chinese Wanda Group. Since the beginning of March 2016, it has been the global industry leader with currently around 11,000 cinema screens. In Germany, AMC is represented by the United Cinemas International brand, which belongs to the Odeon Group.
In 2020, sales are unlikely to reach USD 3 billion. With a lack of unpublished blockbusters like the new James Bond and a correspondingly long opening period, a saturated loss in the billions is likely to arise. The short-term inflated capitalization of just under USD 2 billion could also quickly pulverize overnight. Caution is advised!
B-A-L Germany - Something is up!
Finally, it is worth taking a look at another real estate stock from Germany, B-A-L Germany. In the last 4 weeks, the price has risen secretly from EUR 1.15 to EUR 1.45, with increasing sales. The chart can now really inspire; if the trend continues, soon it will reach the mark of EUR 1.80, where a capital increase took place in early 2020. Fundamentally, things are going well. With a managed living space of 3749 square meters (plus 34.8% in 2020), it is one of the larger private real estate companies.
The newly acquired properties could all be retreaded during the pandemic due to the high availability of artisans. New leases for the winter semester went according to plan and reduced the vacancy rate to 11% - new leases in January have not yet been recorded. The interest rate environment, which remains very low, is currently inviting new investment; especially during the pandemic, there are family household expansions with corresponding housing needs.
There is much to suggest that the B-A-L stock has now started the turnaround. On Friday, more than 50,000 shares changed hands at prices above EUR 1.40, which takes out the chart-technical cap at EUR 1.35 and should lead to further rises. With small values, a development is often underway with rising turnover, which only becomes known later through announcements. A long position is worthwhile here - the analyst firm Sphene Capital also sees an unchanged price target of EUR 2.50.