September 21st, 2020 | 08:38 CEST
Snowflake, Wallstreet:Online, Commerzbank - Investors reward success
Scalable business models are popular with investors. A specific infrastructure, service or product can be offered by the provider to an increasing number of customers at no noticeable additional cost. These often exponential growth rates make the providers' coffers ring. The stock markets usually reward the rosy outlook with strong price gains. If, on the other hand, the growth story is missing, investors can already be satisfied with a sideways movement.
time to read: 2 minutes
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Author:
Carsten Mainitz
ISIN:
US8334451098 , DE000A2GS609 , DE000CBK1001
Table of contents:
"[...] Having Investors like Robert Friedland and Rob McEwen come in with CVMR and Terra Capital really was terrific. [...]" Terry Lynch, CEO, Power Nickel Inc.
Author
Carsten Mainitz
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.
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Shares cloud
Share price doubles since IPO
Last Wednesday, the newcomer to the stock market, Snowflake, drew attention to himself in an impressive way. The shares of the cloud data platform from San Mateo, California, started the day of the IPO in New York with a price increase of over 100%. This was even though the sales range was briefly increased from USD 75 to 85 and then fixed at USD 120. Measured by the inflow of funds of around USD 3.4 billion, Snowflake is the largest US IPO to date this year. The company is currently valued at almost USD 70 billion.
According to press reports, both SAP rival Salesforce, through its investment arm, and Berkshire Hathaway, the company of star investor Warren Buffett, each invested USD 250 million at the IPO.
The company's business model is inspiring many. Snowflake enables customers to consolidate data into a single cloud source, gain real-time business insight, build data-driven applications and share data (multi-cloud strategy, cross-cloud approach). The share closed the week at USD 240.
The 100 Euro mark may soon be broken
With almost 290 million page impressions, the Wallstreet:Online group is by far the largest publisher-independent financial portal operator in the German-speaking world and the largest financial community. Besides, the group has been operating Smartbroker, its online broker, since the beginning of 2020.
Last week, w:o significantly raised its forecast for the current financial year. In the area of financial portals, the Berliners are benefiting from rising user numbers and advertising revenues. Smartbroker's growth is also much more dynamic than expected at the beginning of the year. In May 2020, the company's planning still envisaged the acquisition of 60,000 customers, but now the target is over 83,000 new customers.
The improved outlook caused the share to rise by 6.6% to EUR 84.40 on Friday. It is to be expected that the analyst firms will soon raise their earnings estimates and subsequently their price targets significantly. The average price target should rise from the current EUR 90 to well over EUR 100.
Investors can consider themselves lucky: The share has two strongly growing and even mutually stimulating, scalable business areas. There can therefore be no doubt that w:o can continue to surprise positively in the future.
Still in sideways mode
Commerzbank AG is one of the leading banks for private and corporate customers in Germany. The company has been reinventing itself for many years. The takeover of the online broker Comdirect in the summer was certainly important in this process. The new Commerzbank supervisory board chairman Hans-Jörg Vetter made it clear last week: "Commerzbank is not a restructuring case, but Commerzbank must become more efficient.
Last week, the share lost a good 7% and left XETRA trading at EUR 4.48 on Friday. The group currently has around EUR 5.6 bn on the stock exchange. The publication of the nine-month figures is scheduled for November 5, 2020.
According to a Friday announcement, ECB insiders reported that banks in the euro area are facing an imminent end to the de facto dividend freeze caused by the Corona crisis. This was, however, irrelevant for the low yielding stock. The most recent dividend paid out was EUR 0.20 for the 2018 financial year. The consensus of the 12 analysts is that a dividend of EUR 0.04 per share will not be paid out until the 2021 financial year, i.e. in the calendar year 2022.
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