11. March 2021 | 08:50 CET
Zalando, RYU Apparel, Aurelius: A comeback is in the air
The stock market is a daily business. What's hot today can be out tomorrow. It is similar in fashion, making it all the more important for investors to keep a cool head and not overinterpret every development. The market often lures us onto the wrong track with its capers. Inexperienced investors in particular then make the wrong decisions. We present three comeback stocks and explain how investors can act.
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ISIN: DE000ZAL1111 , CA74979J4072 , CA05156E1007
Zalando: Everything in butter
The Zalando share is a flawless pandemic winner. Its business model is digital. Moreover, Zalando offers existing retailers the opportunity to use its digital infrastructure, creating win-win situations. But Zalando's stock lost about 15% over the course of a month. What happened? After the market traded Zalando as a crisis winner for months, the retail sector's re-openings have been moving into investors' awareness for a few weeks. In this case, traditional stores could initially profit again, so the thinking goes.
But that is too short-sighted. The trend toward online retailing existed even before the pandemic. In the meantime, even older people have become accustomed to shopping online. Many retailers in the city centers have used up their reserves and have their backs to the wall. There are already many empty stores, which does not make the city centers any more attractive. It is not for nothing that stationary retail representatives are warning of drastic months ahead for retailers and city centers. The Zalando share can only be a winner in such a scenario. Perhaps the prices were a bit out of touch with reality at the beginning of the second lockdown. In the long term, however, the stock should return to its growth path.
RYU Apparel: Turnaround with trendy fashion
The RYU Apparel share is also on the growth path. The hip brand for sports and leisure fashion was down until a year ago when a new management team brought the Company forward with great vigor. In addition to modern and unique designs, RYU focused on more efficient operations and contemporary marketing. They have signed a young boxing hopeful for the upcoming Olympics as an advertiser, in addition to the Canadian skateboarding team. In addition, RYU works with an agency that implements product placements in films and series. If a series becomes a worldwide hit and a leading actor shines in the chic clothes or accessories from RYU, this is likely to be extremely beneficial for the awareness.
In mid-February, RYU's stock was already on track to reach its 52-week high, gaining 100% within days. This was due to two distribution agreements that the Company concluded and should give the brand a tailwind in Canada and Mexico. The fundamental development at RYU is intact, and the Company also meets the spirit of the times with its slogan "Respect Your Universe." The share is now as cheap again as it was in January. Investors can take a closer look at the value and fashion of RYU - something is created here...
Aurelius: Business is picking up again
Investors in Aurelius have been waiting a long time for something to emerge. The investment Company buys companies, modernizes and restructures them, and then seeks an exit. During the pandemic, the business of selling companies has come to a standstill. At the same time, however, the crisis has increased the chance that Aurelius will be able to take advantage of business models that have been affected by the unusual situation. The Company itself is also increasingly confident and recently announced further transactions. The market is well receiving the fact that business is picking up again. The share has ended its consolidation phase and has been rising dynamically again for several weeks.
This development is additionally supported by the fact that Aurelius has bought up around 3% of its shares and intends to collect them, increasing the pro-rata value for all other shareholders. From a chart perspective, the share now has room to run to at least EUR 35. The comeback is already underway at Aurelius. Investors in RYU Apparel and Zalando would also be well advised to focus on fundamental trends and not attach too much importance to short-term price movements. RYU, in particular, could become a rapid comeback story after the crash of the past few years, in which the share lost more than 90%.