June 9th, 2021 | 10:41 CEST
SAP, RYU Apparel, Zalando - Do not miss it!
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
SAP SE - Almost 50% made up since price slide
At the current price level of EUR 118, the DAX listed group has already made up almost 50% since the crash last fall. With a market capitalization of around EUR 145 billion, the Walldorf-based Company is the third-largest software group in the world after Microsoft and Oracle. SAP recognized the potential of digital transformation early on and has developed strong, stand-alone cloud solutions such as SAP S4/HANA. Another strategic advantage of the Company is to be open for cross-platform applications. That means that SAP cloud computing solutions can be combined with third-party installations such as those from Google, Amazon Web Services or Microsoft Azure. This setup in cloud computing is a success factor.
However, the cloud issue was also why the share plummeted to around EUR 80 last fall. The group announced that it would focus even more intensely on cloud services and accept high investments for this. The market overreacted at the time because the long-term growth story is entirely intact. The share of revenue generated by the cloud business is expected to rise sharply in the next few years and reach 85% by 2025.
In general, the industry is on the upswing. Most recently, competitor Salesforce reported a good start to the fiscal year and increased its annual targets. The acquisition merry-go-round is also turning. Last December, Salesforce announced the acquisition of office communications service Slack for just under USD 30 billion. Salesforce specializes in cloud-based enterprise software and has acquired more than 60 companies.
RYU APPAREL INC - Out of step?
Over the past few years, the made-up word "athleisure" has become used as a term for sportswear and functional clothing worn in everyday life, also known as urban or activewear. The sportswear industry (Athletic Apparel industry) is dominated by Nike, followed by Adidas. Puma and Under Armour are other well-known players. In addition, there is a larger number of still small, innovative and dynamically growing companies that are increasingly attracting attention.
If you are looking for a small, still relatively undiscovered "athleisure" pearl for your sporty yield portfolio, you may find what you are looking for in Canadian RYU. While investors still had to put CAD 0.26 per share on the table in February, the price recently dropped to CAD 0.07 and is currently trading around CAD 0.10. What happened?
In March, the Company announced an excellent deal. RYU then secured CAD 10 million in convertible option bond financing with an annual interest rate of 7%, which seemed very remarkable given its market capitalization and high conversion price of CAD 0.35 per share.
Then came the bad news on May 11 - The transaction did not go through. One can only speculate as to why. In terms of newsflow, things have also been a bit quiet in recent weeks. But the motivated team of the manufacturer of modern and high-quality sports and functional clothing worn in everyday life will not be defeated. Above all, it is the transformation specialist and implementer of visionary growth strategies, CEO Fazari, and several first-class people. All of them have provided proof-of-concept several times in their professional lives, and all of them are convinced that RYU can become something great. In addition to the high level of innovation, another advantage is the high proportion of online sales and the associated high scalability of the business model. Currently, investors can still buy the shares at a favorable price.
ZALANDO SE - Annual forecast increased, share buyback started
Corona's significant boost to the mail-order business is nothing new. Of course, as Europe's leading online platform for fashion and lifestyle, Zalando has also benefited from this. The assortment ranges from nearly 2,000 globally known brands to local and fast-fashion brands to self-designed private labels. Zalando stores are locally tailored to the needs of customers in 17 different European markets. Zalando's logistics network with five central logistics centers enables efficient delivery to all customers in Europe.
At the beginning of May, Zalando raised its annual forecast for the current fiscal year. The reasons are the robust and profitable growth in the first quarter of 2021, continued high growth in the second quarter and a stable outlook for the second half of the year. Zalando now expects revenue growth of 26% to 31% to EUR 10.1 billion to EUR 10.5 billion and an adjusted EBIT of EUR 400 million to EUR 475 million. Previously, the group expected revenue growth of 24 to 29% and adjusted EBIT of between EUR 350 million and EUR 425 million. In addition, a share buyback program was recently approved. The Company will buy back shares up to a total purchase price of EUR 200 million, but not more than 20 million share certificates. The share buyback began on May 7 and will end no later than July 30, 2021.
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