28. January 2021 | 10:23 CET
Steinhoff International, AdTiger, NEL: How to realize book profits
Easy come easy go. That is how private investors feel time and again. Generating book profits is one thing, but securing them in the long term and turning them into a real trading success is quite another. We explain how it can be possible to realize profits with hot stocks, using Steinhoff International, AdTiger and NEL as examples.
time to read: 2 minutes by Nico Popp
Steinhoff International: What gamblers have to endure
Steinhoff International's stock has been a hot stock for several weeks. Since 2017, the Company has been embroiled in a legal battle. After accounting violations, it rained lawsuits against the Dutch Company with its operational headquarters in South Africa. In total, the lawsuits cover claims amounting to around EUR 8 billion. The Company itself wants to settle these partly in cash and partly in shares in Pepkor. Recently, Pepkor reported quarterly figures. These sent positive signals to gamblers around the penny stock Steinhoff International; if the offer is attractive, the probability of a settlement between the plaintiffs and the furniture group increases. The better the figures at Pepkor, the more likely plaintiffs will also settle with shares in the Company, so the thinking goes.
But speculation on a settlement is by no means a foregone conclusion. First, there are several plaintiffs, and second, litigation per se is not a suitable environment for investments - too often, there are nasty surprises or an information advantage of professional investors. Yesterday, the Steinhoff share climbed from EUR 0.09 to EUR 0.13 within a few hours, only to correct back below the EUR 0.10 mark. Any gamblers who want to accompany this roller coaster ride should accept such fluctuations at least intraday. The exit should work with fixed limits and directly place these orders after purchasing a share on the market. In this way, the exit is guaranteed and there are no book profits.
AdTiger: When does this Asian tiger start to jump?
In contrast to highly hyped gambling stocks, investors can lay the foundation for later success with relatively unknown stocks at entry time. If small companies with an exciting business model can be discovered before the masses, a favorable entry price inevitably results in a lower risk. On the one hand, such stocks have a lower drop height, and, on the other hand, a "safety buffer" is quickly created on the market when more investors become aware of the respective story. The AdTiger share offers just such an investment story.
The Company sees itself as an advertising platform that helps Chinese advertisers to place ads on the most popular networks. Specifically, AdTiger works with Facebook, Google, Yahoo and also TikTok. In addition to its involvement in China, AdTiger is now looking to India and expects further growth from their vast market. A key to more growth could also be the AdTensor software developed by AdTiger, which uses artificial intelligence and large amounts of data to control and optimize ad campaigns. AdTiger is currently valued at around EUR 80 million and has more than EUR 20 million in cash. As the value is presently trending cautiously sideways, investors can analyze the stock in peace and plan an entry in a considered manner.
NEL: Here are the decisive marks
Given the nervous price jumps of their favorite stock, shareholders of the hydrogen pioneer NEL are, at best, capable of deliberate action after the close of trading. Although NEL has gained more than 100% over a three-month period, the warning signals are increasing. Three times in the past four weeks, the stock has gone into reverse beyond the EUR 3.20 mark. Investors sitting on book profits in NEL but still believe in the share's long-term success can reduce part of their risk using partial sales given the large drop in the share price. The chart also provides guidance: While additional selling pressure is to be expected below the EUR 3 mark, the share could pick up speed again beyond the previous high from the beginning of January.