Steinhoff, Sierra Growth, Vantage Towers - Don't sell in May

STEINHOFF INTERNATIONAL HOLDINGS NV - When will the liberation blow come?

For a long time, the German-South African trading group was considered a major player in the European furniture industry until air bookings in the billions came to light and pushed the Group to the abyss. The holding company saved itself with two protective shield proceedings and has been negotiating a future with creditors for some time. The chain, which was known in Germany for Poco, among other things, has several valuable subsidiaries with strong regional positions.

The subsidiary Pepco is soon to go public on the Warsaw stock exchange. The European activities combined in the Pepco group and fully owned by Steinhoff can still be subscribed until May 14. Steinhoff plans to sell 101.3 million Pepco shares in a price range of 38 to 46 zloty (EUR 8.30 to 10.10). This values the Company, which is primarily active in Eastern Europe and the UK, at EUR 4.8 billion to EUR 5.8 billion. The first day of trading is scheduled for May 26.

The gross proceeds of just over EUR 1 billion are to benefit creditors. In addition, the Australian subsidiary Fantastic Furniture is to be listed by the end of the year and ownership of the South African Group Pepkor, in which Steinhoff currently holds 68%, is to be reduced. The IPO of Pepco is a first and crucial step for Steinhoff shareholders. The Company is presently valued at EUR 490 million.

SIERRA GROWTH CORP - Revaluation in sight?

Sierra Growth is a junior exploration Company engaged in acquiring, exploring, and developing early-stage resource projects and currently operating projects in Peru and Nevada. Its focus is on silver, copper, gold and molybdenum. In mid-April, the Company reported that samples on the three Nevada concession areas had confirmed high gold and silver mineralization.

The three concession areas in the US state of Nevada include Glitra/Sat, Mildred/B&C Springs and Betty East. Results from the Mildred property are particularly encouraging. Highlights of the results to date include grab samples of 26.6 g/t gold and 78.6 g/t silver and 667 g/t silver, and 0.41 g/t gold at the mine site. In addition, high grades of base metals (copper, zinc, lead) and trace elements (including bismuth, tellurium, tungsten) were discovered along with anomalous gold and silver.

Based on the historical and recent results and the nature of the concession areas within well-documented mineralized intervals with high gold and silver values, management believes that high-quality exploration targets can be defined during the subsequent phases of exploration. As a result, the likelihood of discovering a significant mineral deposit is increasing considerably. Should the early-stage projects deliver relevant news in the coming months, then the shares of the Canadian Company have considerable upside potential. The Company is currently valued at only CAD 12 million.

VANTAGE TOWERS AG - Index rise in June, analysts advise buying

Almost two months ago, the radio tower division of the British telecommunications group Vodafone ventured the step to the Frankfurt Stock Exchange. At the time, the subscription price of EUR 24 was at the lower end of the book building range of EUR 22.50 to EUR 29. In general, many newcomers to the stock market have found it difficult to achieve high IPO prices in recent weeks. MBB subsidiary, Friedrich Vorwerk Group SE, a leading provider of energy infrastructure solutions for gas, electricity and hydrogen applications, had to accept the lower point of the subscription range at EUR 45. Meinauto even recently canceled its IPO. Together with its British financial investor Hg, the Company decided against the IPO at short notice. The reason given was "the unfavorable market environment."

The Vantage Towers share ended the first day of trading at EUR 25.25. The Group intends to use the issue proceeds of EUR 2.3 billion to reduce debt. The valuation seemed very favorable to us at the time of the IPO, especially compared to the Spanish competitor Cellnex. Cellnex only has a good half of the sites in its portfolio and yet has a market capitalization that is around 70% higher. Vantage Towers is one of Europe's leading radio tower operators, with about 82,000 macro sites in ten countries. The Company was founded in 2020 and is headquartered in Düsseldorf, Germany. Its portfolio includes towers, masts, rooftop sites, Distributed Antenna Systems (DAS), and small cells. The Company generates revenue by building, operating and leasing this passive infrastructure to Vodafone and other wireless network operators. Because of the predictable returns, such business models are popular with institutional investors.

At the end of April, Goldman Sachs and Deutsche Bank initiated coverage of the stock. Both banks gave the share a target price of EUR 33. Yesterday, the share reached a new "all-time high" of EUR 27. If the analysts are to be believed, a further 20% is possible. The stock will also attract more attention due to its imminent inclusion in the index in June. The entry into the SDAX is almost certain; whether it will be enough for the MDAX remains to be seen. Buy.