November 22nd, 2022 | 11:53 CET
Triple AAA stocks take off: Amazon, Aspermont, Alphabet, Allianz - Sellout done?
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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.
Allianz - Like a phoenix rising from the ashes
Most investors had not expected such a rapid revival. But anyone who takes a look at the balance sheets of the major insurers discovers the abundance of interest-bearing assets that are invested for the long term to cover payouts to policyholders. And Allianz management can be delighted with this. After all, interest rates have been rising for a good nine months, and new bond investments are again generating returns.
Europe's largest insurer achieved an operating profit of EUR 10.2 billion in the first nine months, a full 3% more than in the same period last year. Revenues rose by 5.3% to EUR 116 billion. However, due to high expenses for damages and fines following the Structured Alpha fraud scandal in the US, net profit was significantly narrower than in 2021, at EUR 4.7 billion after EUR 6.9 billion. The asset management subsidiary AGI had made false promises to international investors about the available hedges in the funds. With the onset of the pandemic in 2020, the portfolios plummeted. The SEC was called into action, and the parent company Allianz had to pay around EUR 6 billion in fines and damages. In addition, the US capital market will remain closed to fund managers for a full 10 years.
Group CEO Oliver Bäte wants to win back European investors with a major share buyback program. The plan seems to be working because the Allianz share was one of the strongest DAX stocks of the last 6 weeks. From EUR 156 to EUR 204, up 30%, analysts are celebrating again. Deutsche Bank and Berenberg vote "Buy" and expect EUR 235 and EUR 271, respectively, in 12 months. The rapid turnaround in the share must have overwhelmed many Allianz fans.
Aspermont Ltd. - The course for growth has been set
The Aspermont share gained a full 50% between July and September. It was presented to European investors for the first time at an extensive roadshow and was met with great interest. The Perth-based company is a media and fintech company in one. For historical reasons, the core business still includes print media, but these are established and widely used publications for the mining sector.
In the new target sector of media and finance, Aspermont is highly modern as a XaaS provider. The data specialist currently provides over 4 million customers with specially configured information and also offers financial services at the highest level. Aspermont thus meets the needs of its respective recipients and can guarantee the best possible service. After good 9-month figures, the CEO of the B2B service provider Alex Kent expects all business units to be able to grow by at least 20% in total. The Australians finance themselves entirely from their own cash flow. In the past 12 months, B2B revenues per customer have already increased by over 27% to AUD 1,500. The debt-free company now has more than AUD 7 million in cash and cash equivalents.
With the comeback of the financial markets, the development of investor networks is also continuing. The launch of the financing platform "Blu Horseshoe" could also deliver another quantum leap in the lucrative fintech market. The platform matches different interests and arranges equity and debt capital on a commission basis. This further boosts revenues and enables international collaborations in Asia and North America. At a share price of EUR 0.014, Aspermont is currently only valued at a low EUR 36 million. Research house GBC sees opportunities for a significant increase to EUR 0.08 in the next 12 to 24 months.
Amazon versus Alphabet - Already attractive again after the sell-off?
The sharp correction in FAANG stocks caught most investors on the wrong foot. Because after years of rampant growth, the growth figures of the "Big 5" disappointed for the first time. The Q3 reports were then also the confirmation that the rapid growth of the last 5 years is being brought back to a new level. The prices had run too far for such a fundamental decline. Accordingly, they had to correct for the time being after years of upswing. Amazon thus lost 50%, and the search engine giant Alphabet fell by 40%, although the public darlings could come up with attractive splits.
Fundamentally, Amazon and Alphabet continue to grow with a slight delay of about 10% in sales and earnings, but the e-commerce giant has expressed skepticism about the upcoming Christmas season. High inflation and cost pressures on food and energy are shrinking household consumption budgets. This is having a negative impact on online business and is also leading to slightly lower advertising revenues at Google. In the Group, however, Amazon can make up for the dent in the consumer sector through the rapid growth at AWS. Following charges in 2022, earnings per share will rise from USD 1.80 to about USD 6.00 between 2023 and 2026, according to the current analyst consensus. With these growth expectations, the stock is no longer costly at EUR 91, with a P/E ratio of 1.7.
At Alphabet, the current P/E ratio for 2023 has retreated from 24 to 17, and the P/S valuation has reduced from 6 to 4. Due to the unique market position of both companies, one should no longer expect major discounts from the current levels. For newcomers, these are good opportunities to buy at reduced multiples after the long-awaited correction. Nevertheless, pay attention to the sustainable turn on the NASDAQ to avoid falling into a bull trap.
The sell-off on the stock markets is already well advanced. While the DAX 40 is already showing extreme strength again, the NASDAQ is still working on a sustainable bottom. Nevertheless, stocks like Allianz, Amazon and Alphabet are quickly back on the shopping lists. The small Aspermont delivers a unique growth story just when the capital market business is flourishing again.
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