July 6th, 2021 | 14:09 CEST
wallstreet:online, flatexDEGIRO, Commerzbank - Let profits run
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
WALLSTREET:ONLINE AG - Capital increase and lots of insider buying
In mid-June, wallstreet:online carried out a capital increase of 5%. 719,108 share certificates were placed with institutional investors for EUR 26.60 by Bankhaus Metzler. Thus, the Berlin-based Company received a gross inflow of around EUR 19 million. Numerous members of the Board of Management and Supervisory Board subsequently also bought shares. The share is currently trading at EUR 26, bringing the growth stock to EUR 391 million. In a recent study, Warburg Research confirmed that the share has further upside potential. The analysts raised the price target from EUR 25 to EUR 34. The experts are thus taking account of the faster than forecast growth.
wallstreet:online is likely to put the new funds into the expansion of its transaction business. The Berlin-based Company has been on the market since 2019 with its neobroker Smartbroker. Neobrokers allow investors to trade very cheaply, sometimes without any costs. This free trading for customers has allowed the number of transactions to explode for some time and for securities trading banks and brokers to make enormous profits. Neobrokers receive for each trade of their customers, even if they trade for free, a fee from the processors - platforms or brokers. Smartbroker differentiates itself again by offering low conditions and additionally a wide range of products.
The highly scalable and dynamically growing transaction business already determines the equity story of the Company. However, the established core business of advertising with high margins is still essential for the current growth. After all, with the right dovetailing of high-reach portals, the linking to securities trading coupled with the one or other product innovation give the share a lot of imagination.
flatexDEGIRO AG - Existing shareholders part with blocks of shares
With the acquisition of competitor DEGIRO last year, flatex, now operating as flatexDEGIRO, rose to become the most prominent European online broker for private customers. The SDAX-listed group is active in 18 European countries and formulated an ambitious medium-term plan in the spring. The Company aims to serve seven to eight million brokerage customers in 2026. A few days ago, however, the existing shareholders of DEGIRO seized the opportunity to sell parts of their share packages.
According to a Company statement, the background to this is to increase the free float of the shares and thus improve the chances of an MDAX promotion. Jeffries placed 650,000 shares at EUR 109 each with institutional investors a few days ago. The sellers are Degiro co-founders Kipei, Anderluh and Arrow. The latter now still holds around 16% of the shares. Currently, the share is quoted at EUR 116, which gives the online broker a market capitalization of EUR 3.2 billion. Analysts believe the stock has an average upside potential of 28%.
COMMERZBANK AG - European banking environment provides encouragement
A few days ago, the ECB's banking supervision head, Andrea Enria, had good news for European bank shareholders. In his opinion, the end of the dividend freeze for Europe's banks is drawing closer. Data has shown that institutions are resilient, well-capitalized and able to support households and businesses in dealing with the Corona Crisis, the chief supervisor said, explaining his assessment. "Against this background, the European banking supervisory authority will also take steps towards normalization at the end of September. We plan - provided there are no negative surprises - to lift our extraordinary recommendation to all banks, not to distribute dividends and not to carry out any share buybacks," said Enria.
In the course of the Corona pandemic, the ECB had asked European banking institutions not to pay dividends or buy back their own shares until the end of September 2021, if possible. At present, this affects Commerzbank only indirectly, as the bank is currently still undergoing a transformation process. Through massive cost savings, mainly through branch closures, the institution aims to reduce its cost base by 20% by 2024. Should the bank sustainably achieve the turnaround, which currently looks likely, the stock could develop into a real value play. The shares are trading at around EUR 6, well below book value.
Online brokers and Neobrokers are among the favorites to benefit from a continued positive stock market environment. flatexDEGIRO is undoubtedly the top dog here, with a market capitalization of over EUR 3 billion. We find wallstreet:online much more exciting as the Berlin-based company is only at the beginning of solid growth. For those who want to play the European banking sector plus turnaround, the Commerzbank share is interesting.
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