28. May 2021 | 10:14 CET
wallstreet:online, flatexDEGIRO, Commerzbank - If you look closely...
A positive stock market environment, low-interest rates and stock trading at zero cost are the reasons that have sent the prices of stockbrokers and brokers from all-time high to all-time high in recent months. Intermittent breathers are healthy for the peakers. The latest round of capital in unlisted broker Trade Republic, with a valuation of more than EUR 4 billion, demonstrates the potential investors have for new fee models and an active investor base. The following three stocks are far from exhausted, in our opinion.
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ISIN: DE000A2GS609 , DE000FTG1111 , DE000CBK1001
WALLSTREET:ONLINE AG - Share increase as a share price booster
The Company's past is impressive. But what is happening right now, and where the Company wants to go, even more so. wallstreet:online AG has undoubtedly established itself as a force to be reckoned with in the German-speaking market for financial portals. With the launch of Smartbroker at the end of 2019, a new chapter has been opened. The highly scalable and dynamically growing transaction business will soon eclipse the established core business of advertising, and the proper course has been set for this. The combination of high-reach portals and product innovations makes it possible to expand quickly in the relevant market.
Smartbroker is a so-called neo broker. Neo brokers enable customers to trade very favorably, sometimes even without any costs. How can this work? Quite simply - someone else pays; these are platforms like gettex or brokers like Lang & Schwarz, who pay a fee. Smartbroker's competitors include Trade Republic, justTrade and Gratisbroker. However, Smartbroker differentiates itself once again by offering low terms and additionally a wide range of products.
Smartbroker is operated by the subsidiary wallstreet:online capital AG, in which the Berlin-based Company has held a stake of around 73% to date. Now wallstreet:online announced its intention to increase its share in wallstreet:online capital to more than 95%. To dovetail growth more closely, CEO Matthias Hach is also taking over the subsidiary's board position. Long-time board member Thomas Soltau will remain on board as a co-board member. The Group has already significantly expanded the Executive Board in the last few months, creating the necessary rapid and successful expansion structures.
But what does all this mean for the share? Well, Smartbroker aims to have a customer base of 200,000 investors by the end of the year. The mid-term target is about double that. We think that is way too low. Currently, Smartbroker has more than EUR 5 billion in customer assets. At the current share price of EUR 26.50, the Group is valued at almost EUR 400 million - including the profitable core business of advertising, of course. Considering that competitor Trade Republic, with a customer base of "over 1 million" and customer funds of more than EUR 6 billion, was recently granted a valuation of over EUR 4 billion, the savvy investor might conclude that wallstreet:online's stock is far, far too cheap. Score!
flatexDEGIRO AG - That is quite an announcement
This Tuesday, Europe's largest online broker for private customers published its new 5-year vision. Just last year, flatex took over competitor DEGIRO. With this lineup, the Company trusts itself to serve 7 to 8 million brokerage customers in 2026 and process 250 to 350 million transactions per year. This means that the Company aims to acquire an average of more than 1 million customers per year in the medium term! At first glance, this figure may sound a little too ambitious, but one should bear in mind that flatexDEGIRO is active in 18 European countries. Those countries on which the Group mainly focuses are those that have enormous catch-up potential in terms of online brokerage.
The stock market is celebrating this outlook. The analysts were enthusiastic and surpassed themselves by raising their price targets. The SDAX title is currently trading at around EUR 105, within sight of the all-time high of EUR 114 reached at the end of April. The stock market value is presently EUR 2.9 billion. If analysts are to be believed, the current level offers a phenomenal buying opportunity. The most recent assessments by Berenberg and Warburg give price targets of EUR 165 and EUR 170, respectively. That means upside potential of around 60%!
COMMERZBANK AG - Into the black with a structured plan
In the middle of the month, Commerzbank invited its long-suffering shareholders to the Corona-compliant virtual AGM. After many years of frustration, the management's words seem to give courage and one or the other development. One thing is sure: in the course of fundamental restructuring, the red pencil is being applied to many points. By the end of 2024, the number of full-time positions across the Group will fall from around 39,500 to 32,000. The store network in Germany will be almost halved to 450 locations. In the current year, 200 stores are already to be closed. In addition, the Group is giving up 15 sites abroad.
By 2024, the bank aims to save around 20% of its previous costs with all these measures and thus become profitable and competitive again. For those who need something tangible in the present and dreams of the future, we recommend studying the Q1 figures. After all, things went much better for the institute in the first quarter than market participants had expected. Instead of analysts' triple-digit million loss forecast, the Company reported a profit of EUR 133 million. Investors should keep an eye on the stock. The share is not expensive, especially if further successes of the restructuring become visible.