September 5th, 2022 | 12:54 CEST
Triple AAA shares: Amazon, Aspermont, Alphabet, Allianz - Where does the FAANG trigger sit?
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"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Amazon versus Alphabet - Who has the analytical edge?
In the current Nasdaq correction, the Internet giants Amazon and Alphabet have also lost ground. Although both stocks were able to carry out successful stock splits in 2022, the effects quickly evaporated, just as they did recently with Tesla. The best performance after the split was achieved by the Amazon share, which is still 12% above the level of the free distribution. Alphabet is already 10% below this level. With the split announcement, the Tesla share already rose by 40% and has only now entered a stronger consolidation.
From an analytical point of view, Amazon continues to impress with its dynamic growth model, especially in the area of web services. The subsidiary AWS stands by large companies with its cloud services. Whether computing power, database storage, content provision or other functions are required, AWS's flexibility and scalability seem almost infinite. As a result, the Group holding company's estimated revenue will be about USD 522 billion in 2022, growing at about 15% per annum over the next few years. After charges in 2022, earnings per share will rise from USD 2.30 to about USD 7.84 between 2023 and 2026, according to analyst consensus. With these growth expectations, the stock is not particularly expensive at EUR 128, despite a P/S ratio of 3.
With the Alphabet share, investors are participating in the largest information company in the world. The current market capitalization is EUR 1.4 trillion. Google & Co. are expected to achieve annual revenue growth of 12%. Unlike other cyclical business models, the profit trend leads very robustly with an annual increase of 15-17%, letting the P/E ratio drop from currently 21 to about 13 in 2026. The P/S ratio is traditionally high at around a factor of 5.
Due to market conditions, the Alphabet share has corrected around 10% to EUR 109 in just 2 weeks. Thus, both FAANG shares are again attractively valued and should be bought in weakness for the long-term portfolio. But wait for a trend change on the NASDAQ.
Aspermont Ltd. - Top network and new strategic cooperation
Information is also the most important business basis for Australian Aspermont Ltd. The Perth-based company is a media and fintech company in one. Although its core business historically still includes print media, these are established and widely used publications for the mining sector. In the new target sector, however, Aspermont is highly modern, providing its 4 million industry customers with recipient-ready data and financial services. With its XaaS model, including a modern audience-client ecosystem, the news provider can flexibly adapt to the needs of each recipient and guarantee the best possible service. In its current setup, Aspermont is the leading media service provider in the global commodity industry in B2B. Its versatile model can be scaled to serve additional business areas in new countries and languages at any time.
Very interesting is also the development of an investor network for financing intermediation with the help of a variable platform. With the launch of "Blu Horseshoe", a quantum leap and the entry into the lucrative fintech market could now be celebrated. The platform matches different interests and arranges equity and debt capital on a commission basis. Also valuable is the cooperation with SooChow CSSD (SCCM), a Chinese investment bank focused intensively on growth companies in Asia. The parent company of SCCM is SooChow Securities, which is listed on the Shanghai Stock Exchange. Through this cooperation, Aspermont can consistently extend its feelers to Asia and execute capital market projects.
With over 8 million contacts at management level, the business can now grow briskly. The operational trend is convincing, as half-year revenues for 2022 have already increased from AUD 7.3 to 9.3 million. An EBITDA margin of 13% has grown the cash balance to AUD 6.6 million. However, at a share price of EUR 0.013, Aspermont is valued at a low EUR 37 million. The Tradegate exchange offers German investors very good liquidity in the share. For more details, the Aspermont analysis on researchanalyst.com is recommended.
Allianz - Assets slowly coming under pressure
Information is also the most important asset for the Allianz Group. In addition to its core insurance business, the Group has now invested over EUR 2 trillion in the capital markets through its subsidiary Allianz Global Investors. The returns generated there benefit fund subscribers and policyholders because the surpluses from capital management flow into the profit and loss account.
Due to the development of the capital markets in 2022, the surpluses will likely be somewhat smaller in the near future, as the prices of bonds and shares have come under considerable pressure in the last 6 months. At the half-year mark, AGI's sales are down by a moderate 1.7% to EUR 4.1 billion. Nevertheless, the Group's sales increased by 7.2% to EUR 81.2 billion. Operating profit was also slightly higher than the previous year at EUR 6.7 billion. Unfortunately, however, EUR 1.6 billion had to be set aside at the end of the first half of the year for the US lawsuits relating to the Allianz GI US Structured Alpha Fund. The current share buyback program was terminated as planned in July, with 5.1 million shares repurchased.
It will be difficult for the Allianz Group to maintain the high level of its figures in the current year. The valuations of both the liquid assets and the real estate portfolios have gone a long way. A stronger correction in the Group's assets and higher loss ratios due to the climate changes could weigh on the Group at the end of the year. Nevertheless, we believe in a continued high dividend of most recently EUR 10.80 or the equivalent of 5.2%. With a current price of EUR 169, the Allianz share is trading just below book value. Although the share has already corrected by 15% in the last 12 months, the DAX standard value should only be bought in weakness. Technically, the support zone between EUR 152 and 164 is critical in order not to endanger the long upward trend since 2009. Keep watch!
The sell-off on the stock markets continues. Investors are looking for solid stocks in troubled times. Our AAA stock selection shows attractive stocks that can be bought up during periods of weakness. In the current environment, however, it takes a little longer for the supposed investment success to materialize.
Conflict of interest
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