September 22nd, 2022 | 14:01 CEST
Uniper and Kion in shock, partial mobilization at BASF and Meta Materials
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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.
BASF - The acid test is still to come
Whenever the DAX takes a breath of morning air, BASF shares make smaller daily gains. Overall, this means that the share price has been able to hold above the EUR 40 mark for weeks. Technical support lines, which date back to the pandemic correction in 2020, are also located here. After all, BASF shares have already doubled once without today's gas problems, namely from March 2020 to February 2021.
Analytically, the Ludwigshafen-based chemical giant is more attractive than ever. That is because, in all likelihood, sales will even be able to increase in 2022, and it should also be possible to pass on prices to chemical precursors on the market as the increased cost pressure runs through the entire sector. After all, BASF is also the world market leader for some products and can make announcements. The pressure is then passed on to the next intermediate customer.
With a P/E ratio of 7.7 and a dividend yield of over 8%, BASF shares remain a clear frontrunner in the valuation parameters. However, the shortage of gas in Germany, which has not yet been completely eliminated, could continue to be a burden. If the gas storage facilities were to empty again in winter, industrial capacities would probably also have to be curtailed. 75% of all chemical processing runs on gas, so BASF's dependence could not be greater. The share should continue to be actively monitored, and a dividend cut in the coming years should be considered. If the gas front eases, the stock would be an immediate "must buy."
Meta Materials - An extensive collection of good ideas
In order to be at the forefront of today's high-tech industry, one needs good thinking in the development department and management that recognizes trends early on and takes the lead in bringing new ideas to market by patenting them. Even though META®-Materials' solutions address entire industries, some with only minor technical features, the main thrusts can be divided into the three areas of holography, lithography and wireless sensor technology with strong IT networking. Importantly, the technologies are capable of further development with the help of artificial intelligence, thus affecting entire sectors in the high-tech industry. In days of energy scarcity and increasing industrial efficiencies, process efficiency is coming back into the spotlight. Especially in automotive engineering or medical and chip technology, surface coatings and flexible materials are in demand that consume little energy and offer progress in terms of safety. Developments such as autonomous driving, remote production or augmented reality would be impossible without smart components. Ultimately, machines are enabled to function better in sensitive areas than humans with their natural performance limits.
In the field of e-mobility, META® recently joined forces with Coulometrics to optimize energy cells. In the medical sector, META® is working in early stroke detection to improve the resolution and transmission speed of portable scanners. The most important technologies are found on glass, structural components and surfaces; they are also used, for example, in armor for the special design of camouflage caps or the integration of "invisible" antennas. The development of these high-performance materials has now generated sales of USD 3.3 million in the second quarter. Although this is still very little, it is nothing out of the ordinary for a company focused on research and development. Once an idea has been developed into a blockbuster, its widespread use in the industry could quickly bring substantial licensing revenues into the Company's coffers, taking it into a whole new category.
Due to the last capital increase in June, the cash box should still be well filled because currently, it is becoming increasingly difficult to raise growth capital quickly. The buying mood of NASDAQ investors has not yet fully returned after the recent price corrections. At a price of around EUR 0.80, the 360.84 million shares are currently valued at EUR 288 million. For the high-tech share, it can go up again quickly with good news. The value is very liquid and easily tradable.
CEO George Palikaras will report live on the latest progress at Meta Materials on September 27, 2022, at 7:30 pm at the 4th International Investment Forum. Click here for free registration.
Uniper and Kion - This is what capitulation looks like
A sell-off with no end in sight - this is how one could title the charts of Uniper and Kion. Both stocks are currently not very popular with investors. At Uniper, the almost complete nationalization ensures a total dilution of the existing shareholders. At present, it is even doubtful whether the business model of free gas trading can still be implemented in Germany. It seems strange that gas, one of the world's most liquid commodities, is degenerating into political madness in Germany. Regulatory changes in the form of state price limits would have to be made before private entrepreneurship could flourish again. As mentioned above, BASF business is also hanging by a thread on gas availability. In the long term, this could weigh heavily on the German economy.
Kion was still at just under EUR 100 at the beginning of the year and can now be bought at EUR 20. The market capitalization has now quintupled to EUR 2.75 billion in 9 months of the current year. The logistics equipment supplier expects a sharp drop in profits, with adjusted operating profit (EBIT) down EUR 200 to 300 million YOY. High inflation, increased material costs and wages, and supply bottlenecks are putting pressure on the world's largest forklift manufacturer, as passing on the high costs does not fit into its long-term contractual agreements with key customers. An operating loss of EUR 190 million is now expected.
Uniper, like Kion, is currently not an investment security but rather a casino stock. However, while the business model must be doubted in the case of Uniper, Kion can probably stabilize again through medium-term price adjustments in buying and selling. Nevertheless, buy only when upward momentum sets in.
The stock market will continue to react to the difficult economic situation for some time. For this, the prices still appear quite high. Therefore, expect further downward corrections, but medium-term entry opportunities will also become apparent. BASF and Meta Materials are already attractive, while Uniper and Kion should be watched closely to see what happens to their prices.
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