All German Shares part 16 (Nr. 301-325)
At the moment I can keep the weekly frequency for this series. This time, the random generator only included 2 stocks that in my opinion are worth “watching” but some of the stocks covered have interesting histories.
301. Lotto24 AG
Lotto24 is providing online access to Germany’s state lottery. With a market cap of 353 mn, investors get a run rate of 5mn Profit. The high market cap is mostly a result of a successful take-over event of Zeal Group, which now seems to own 93% of the shares. a “pass” for me.
302. WCM Beteiligungs- und Grundbesitz Aktiengesellschaft
WCM is a company with an interesting past. The vehicle of German Billionaire Karl Ehlerding was one of the high flyers of the Dotcom Boom and even tried to acquire Commerzbank. The company went bankrupt in 2006 but recently reemerged as a real estate company. WCM is now majority owned by another listed real estate company, TLG and currently has a market cap of 700 mn. As all the other real estate companies, this one is a “pass”.
303. HOMAG AG
HOMAG is a 618 mn market cap machinery company that specializes in machinery for wood processing (i.e. furniture industry, etc.). HOMAg is majority owned (64%) by also listed Duerr AG. Duerr has established a “Profit and Loss transfer agreement” with HOMAG which means that HOMAG shareholders are only entitled to a guaranteed dividendd dividend of 1,03 EUR per share. Economically, the share is therefore a bond.
I find it therefore super strange how the HOMAG share has moved over the last few years:
In theory, HOMAG would be an attractive position for a bond portfolio as a perpetual bond with a 2,5% yield, however as I am not in the bond business, I’ll “pass”.
304. Cash Medien AG
Cash Medien publishes a few investment magazines and has a market cap of 5.8 mn EUR. The company is shrinking as many print publishers. “Pass”
305. Fielmann AG
Fielmann is one of the stocks where I could always hit myself not to have invested despite being a loyal client for a long time. Fielmann with a market cap of ~6 bn is one of the typical family owned and run “hidden champions” dominating the German market for prescription glasses. Fielmann has been a great long term compounder, increasing over 10x over the last 15 years:
These days however, the company trades at an P/E of around 35 and grows only very little (Profit growth ~5%) which in my opinion does not leave a lot of upside for shareholders at current prices. As a quality stock it will however still go on my “watch” list.
306. Global Oil & Gas AG
Big name, little market cap: 1.2 mn. “pass”
307. Formycon AG
321 mn EUR market cap pharmaceutical company specializing in “biosimilars”. In the first 6 months of 2019, sales have gone down by ~-1/3 and the company has made a loss. Not sure what justifies the market cap, most likely a lot of hope. “pass”.
308. Ultrasonic AG
For some reasons still listed remainder of a Chinese fraud. “pass”.
309. Böwe Systec AG
Another listed bankrupt shell company. “Pass”.
310. H&R GmbH &Co KGaA
A 195 mn market cap chemical company which seems to be in a deep slump. The company trades at ~0.5 x book value, but has a bad reputation from a governance perspective. Maybe a deep value opportunity for specialists, but for me it is a “pass”.
311. Alba SE (ex Interseroh)
Alba is a Berlin based, 590 mn market cap company active in waste management and recycling. The stock is 93% majority owned by the holding of the Alba Group and has a “profit & loss transfer agreement” in place. This means a guaranteed gross dividend of ~4 EUR per year which at forst sight looks attractive. However the whole Alba Group has very shaky finances and this explains the relatively low share price of this sub. “Pass”.
312. PVA Tepla AG
PVA Tepla is a 338 mn EUR market cap technology company that delivers mainly equipment to the semiconductor industry. The company is currently enjoying significant growth (+40%) although order entry grows a lot less and Q3 is already flat yoy. The company seems to tarde at around 30-40x 2019 earnings and with EBIT margins of 9% I don’t really understand why. “Pass”.
313. Interstahl Handels AG
A 1.5 mn market cap company that changes its name frequently. “pass”.
314. Backbone Technology AG
Another name changing company with a 5 mn market cap and some “technology assets”. “Pass”.
315. Aktienbrauerei Kaufbeuren AG
23 mn market cap brewery from southern Bavaria. The brewery seems to be loss making, but the listed company only holds a 45% minority stake and is focusing on….Real Estate of course. From the outside, it doesn’t look that promising and is maybe mostly interesting for locals. “Pass”.
316. Paion AG
Another “Biopharmaceutical” company worth 160 mn EUR. The company is burning money since a long time. I have no idea if their pipeline is any good, so “Pass”.
317. Publity AG
One of the many companies riding the real estate wave in Germany. With a 540 mn EUR market cap already a significant player but with a very volatile development in the past months. For me, as in the other cases, a “pass”.
318. Janosch Film & Medien AG
Janosch is a 6 mn market cap media company that shows an incredible performance in the past years:
Over the last 10 years, the stock went up around 20x. Operationally, the company has indeed improved and on top of licensing the famous Janosch Children comics, the company seems to plan to open child care centers. For the time being, I’ll keep them on “watch”.
319. Munich Brand Hub AG
Munich Brands Hub is a 0.2 mn nano cap who does something with brands but not very successful. “pass”.
320. ABO Invest AG
ABO Invest is a 93 mn market cap company that itself invests into wind parks. The company is signifcantly leveraged (~90% LTV) and therefore a clear “pass” for me.
321. IVU Traffic AG
IVU Traffic is a 233 mn market cap software company that specializes as the name indicates on public transport solutions. As many software companies, the stock enjoyed a decent upwards move in the recent months:
Operationally it is not clear at first sight what exactly has driven this, as Q3 2019 looks a lot weeker than Q3 2018. The company estimates 9 mn EBIT for 2019 which means an EV/EBIT of >20 for a company that is depending on a few large projects. “pass”.
322. Deutsche Cannabis
A 5 mn market cap “PE company for Hemp products”. A little bit behind on the hype curve, “pass”.
323. Black Pearl Digital AG
A 1.2 mn nano cap with frequent name changes, now focusing on “Blockchain”. Pass.
324. Datron AG
Datron is a 46 mn EUR market cap machinery company, which has been IPOed in 2011 and is now trading at the same level as back then. The company i majority owned by the founding family and specializes in milling machines.
The first half year 2019 has been disappointing. Overall the company looks conservatively run but somehow vulnerable to macro issues. “pass”.
325. Masterflex SE
Masterflex is a 44mn EUR market cap company active in specialty plastics, more precisely plastic tubes/hoses for industrial use.
In 2019, Masterflex announced on 8.11. Q3 numbers and stated that they are “On track” to reach their goals, only to be followed by a profit warning 2 weeks later. The stock is already on a downtrend since the beginning of 2018:
Already in 2018, profitability declined and also in 2018 they came out with a late profit warning, so visibility seems to be an issue. “pass”.