29. June 2021 | 12:37 CET
Siemens Energy, QMines, AUTO1 Group - Watch out: invest in the best stock market newcomers!
IPO underpricing measures the difference between the price subscribers have to pay for new issues, i.e. the issue price and the prices then traded on the stock exchange. This phenomenon was first addressed in studies some 50 years ago. In sum, IPO underpricing exists worldwide. However, depending on the market phase, country and market capitalization size, this effect can look very different. It is, therefore, wrong to conclude that every IPO is a success. We separate the wheat from the chaff. Which stock is a clear buy?
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ISIN: SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0 , QMines | AU0000141533 , DE000A2LQ884
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Siemens Energy - Analysts see 40% upside potential
Siemens Energy was created through a spin-off from Siemens AG last year. Since the IPO on September 28, 2020, the parent company still owns 35.1%, and Siemens Pension-Trust e.V. still owns 9.9% of the spin-off. The first traded price was EUR 22.01; currently, the shares are trading at around EUR 25.50. The DAX-listed Group is thus valued at EUR 18.6 billion. Since the IPO, the shares have traded in a range of EUR 18.37 to EUR 34.49.
Siemens Energy is active worldwide along almost the entire energy value chain and employs around 91,000 people. Its product range includes gas turbines, steam turbines, generators, transformers and compressors. With a 67% stake in Siemens Gamesa Renewable Energy, Siemens Energy is also one of the global market leaders in the renewable energy sector. Siemens Gamesa is one of the largest wind power producers globally and recently reported a jump in profits.
The list of Siemens Energy's strategic initiatives and cooperation is immensely long and includes Salzgitter, RWE, Uniper and the Japanese Mitsubishi Group. The Company is still in the red. But already in the next fiscal year, according to analyst consensus, the Company will generate sales of EUR 30.2 billion and make a profit. The 2022 P/E ratio is currently 32, which is a high value, but it will drop noticeably in subsequent years. Experts forecast a net cash position of EUR 3 billion for the coming fiscal year. On average, analysts attest the stock an upside of a good 40% to EUR 36.
QMINES LIMITED - Significantly undervalued compared to competitors
At the beginning of May, QMines, the Australian-based exploration company, made its stock market debut on the ASX for AUD 0.30 per share. Its flagship project is Mount Chalmers, a high-grade historic copper and gold mine. The project has an existing resource and several high-priority exploration targets that offer significant growth potential. The Company has planned an aggressive exploration program to test a number of these targets, increase the existing resource, and enhance shareholder value. In addition, the Company owns three other projects.
At the end of May, the Company published excellent drill results on the main Mount Chalmers project. In total, the first test bores were carried out over almost 1,600m. Maximum values of 13.4% copper, 6.1 g/t gold and 31 g/t silver were found. Further drilling over 3,000m was started. The share price subsequently jumped significantly but is currently back within sight of the IPO price of AUD 0.30 at AUD 0.34. The good drilling results increase the probability that the official resource estimates will be significantly higher in the medium term. With a market capitalization of AUD 38 million, the stock is not expensive, given the potential. Analysts believe that the stock is significantly undervalued compared to its competitors and believe that the shares have a potential upside of around 50%!
AUTO1 GROUP SE - Putting more horsepower on the road
At the end of February, the leading European digital automotive platform for online buying and selling used cars entered the scene. Through its established platforms: wirkaufendeinauto.de, AUTO1.com and Autohero, AUTO1 Group offers consumers and professional car dealers throughout continental Europe a quick and easy way to sell and buy used cars without time-consuming price negotiations. The Group is present in more than 30 countries with more than 80 brands and all price categories. Analysts forecast sales of EUR 4.1 billion for the current fiscal year, rising to EUR 5.7 billion in 2022. The Group will still be in the red in both 2021 and 2022. However, this does not stop analysts from granting the share an average upside potential of a good 50% to EUR 54.50.
Recently, the Company announced an innovative expansion of its financing mix with the issue of a digital bond as a security token offering (STO). According to the Company, this is the first STO in the German automotive sector. The offering has a maximum volume of EUR 4 million with a one-year maturity and an interest rate of 5% per annum. Professional investors only can subscribe to the digital bond with a minimum subscription amount of EUR 200,000. With this instrument, the Group provides vehicle dealers with liquidity by enabling them to finance the purchase of cars through to resale to the end customer. Everything is mapped digitally. The share is currently trading at around EUR 35, with a market capitalization of EUR 7.4 billion. The first traded price was just under EUR 46. Interim conclusion: Thanks to empirical capital market research - exceptions prove the rule!