October 4th, 2022 | 11:59 CEST
RWE, Pathfinder Ventures, United Internet - Panic as an opportunity
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"[...] In addition to campsite fees, Pathfinder Ventures has put itself in a position to offer all of these sought-after camping solutions. The only thing they don't sell is the RV itself. [...]" Joe Bleackley, CEO, Pathfinder Ventures Inc.
Pathfinder Ventures - Pearl in the growth market
At the latest, since the Corona pandemic, as an alternative to all-inclusive vacations in hotel bunkers, camping has conquered the mass market. This trend is likely to accelerate further for another reason. Due to the high inflation figures, there is less and less money for the average citizen for a well-deserved vacation. While in Canada, one must pay, on average, for a hotel in the main season CAD 200 to CAD 400, one is in good hands at the Pathfinder Camp Resort paying between CAD 65 CAD and CAD 70. In Canada, around 2.1 million inhabitants own a motorhome, meaning approximately 8 million trips are made annually.
In addition to established players, newcomer Pathfinder Ventures has recently caused a sensation. The Canadians are dedicated to building a network of upscale, family-friendly RV parks and campgrounds under the name "Pathfinder Camp Resorts." Pathfinder currently operates three camping resorts in British Columbia and is looking to both acquisitions and further developments to expand its network. The Agassiz-Harrison facility is to be expanded through the purchase of an adjacent property. In addition, two other resorts are to be acquired. The chances for a sharp expansion are good because succession planning is unresolved at many campground operators, so that Pathfinder Ventures can profit from this situation. In addition to buying and remodeling, the Canadians also plan to build new state-of-the-art resorts. The long-term goal is also to install a franchise system.
The figures for the second quarter of 2022 already indicate expansive growth. Here, Pathfinder Ventures was able to expand revenues by 81% compared to the same period last year to CAD 917,000. Despite high investments, EBITDA was improved from minus CAD 398,120 to currently plus CAD 54,395. At the end of the second quarter, the Company had a cash balance of CAD 1.58 million. The stock market value of the growth company, which is traded in Toronto and Frankfurt, amounts to EUR 3.38 million. Despite the strong performance, the share has lost about 55% of its value since the beginning of the year.
RWE - Analysts enthusiastic
With enormous relative strength compared to the overall market, the share of the energy supply group from Essen shone in recent months. Since Russia invaded Ukraine, the shares of the DAX-listed company have been up 34% and are currently still up 13% at a price of EUR 38.48. A slide below the upward trend at EUR 36.77, which has been in place since September 2015, would pose a threat. In contrast, the chart would brighten up further if the share price were to rise above the annual high of EUR 44.16, which it has tested twice.
The multi-billion dollar acquisition of the US solar specialist Con Edison Clean Energy created a positive mood. The transaction values one of the US market's leading operators and developers of solar plants and storage facilities at USD 6.8 billion. RWE intends to secure this with a bridge loan, and is to be partially refinanced through the issuance of a mandatory convertible bond with a total nominal amount of almost EUR 2.5 billion and a maturity of up to one year. The subscriber to the paper will be Qatar Holding, a wholly owned subsidiary of Qatar Investment Authority. The bond will be converted into new no-par value bearer shares of RWE AG, which are expected to represent just under 10% of the current share capital. This will make the Emirate of Qatar by far the largest single shareholder.
Various analyst firms expressed their enthusiasm about the latest takeover. The major Swiss bank UBS reiterated its rating for RWE at "Buy" with a target price of EUR 47.50. The US bank JPMorgan continues to see EUR 60 for the papers of the Essen-based company. After the acquisition of the US solar company, the rating also remains "Overweight".
United Internet - Profit forecasts raised
Positive news also comes from United Internet. The internet service provider from Montabaur expects higher profits in the current year than previously anticipated. At second glance, however, the increases do not represent additional business but rather lower capital expenditure due to the faltering network rollout. According to the press release, sales continue to be in the range of EUR 5.85 billion. Earnings before interest, taxes, depreciation and amortization increased to EUR 1.27 billion from the previously estimated EUR 1.26 billion. The savings were the result of unexpected delays in the provision of antenna sites due to delivery bottlenecks at one of 1&1's rollout partners.
US investment bank Goldman Sachs left its rating for United Internet at "neutral" with a price target of EUR 22 after raising its forecast. The revised outlook underlines the profitability of the telecommunications reseller. However, the statements for the coming year imply weaker growth and higher investments, emphasized analyst Andrew Lee.
The overall chart picture for United Internet shares remains tense. After a loss of over 47% since the beginning of the year, the critical support level of EUR 20.40 was breached. The next support level is, therefore, the interim high of EUR 17.52 reached in 2012.
Due to the strong corrections on the stock markets and the emerging panic, selected stocks offer long-term entry opportunities. Pathfinder Ventures is clearly on an expansion course. Analysts are enthusiastic about RWE due to the recent acquisition. By contrast, the chart picture for United Internet remains negative.
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