Posted on by

Paypal – despite –80%, I think it can fall another 50%

PayPal’s stock was without a doubt one of the highfliers during the 2020–2021 tech mania. At its top, PayPal was valued at around 15x sales, having a market cap of more than 350 bn. USD, despite only 6 bn. USD in free cash flow. Not so surprisingly, the stock came back from this unsustainable level, though many likely didn’t expect to see less than 15x earnings after a drop of 80%. Time for a turnaround? I think this is still a strong value trap, good enough to fall another 50%.

Continue reading →
Posted on by

Can you resist?

With every passing day and week where one is not invested in the “Magnificent Seven” tech stocks, pressure continues to mount up – at least for those who allow for it. Investors who underperform the broader market indexes, are left in the dark. Usually, active fund managers have to report frequently and to apologize for not having been able to keep pace. It can be a mental strain and cost them their job. Private investors at some point also lose patience and sanity. A plea to stay calm and sane.

Continue reading →
Posted on by

Time to look at gas + new research report

Energy in general is a hotly debated and controversial topic. But when it comes to natural gas, it can become extreme, especially if you mix in liquefied natural gas – or in short: LNG. For long, I have been sitting on the sidelines regarding this market. But I feel now is the time to not only write a Weekly, but also a research report for my members about it – as a hedge from a European perspective. As a bonus, I estimate a 10% dividend yield to be announced next week from my latest pick.

Continue reading →
Posted on by

Why I don’t like diversification

Buying either parts of or even entire other companies is a common way for businesses to grow. This inorganic route though is often used for empire building (higher salaries and bonuses), sometimes even to hide own problems inside the core business (presenting an external growth story) and more often than not destroying shareholder value by overpaying for the targets. Today, I’m discussing a company that is losing through diversification.

Continue reading →
Posted on by

Is this the logical pick in the weight loss mania?

Hypes and manias are part of the game of stock markets. Whenever a new trend emerges, more and more people hear of it and start to invest. Commonly, it’s first the professionals and depending on the underlying theme also ultra-contrarian investors. If a story has legs, then the retail crowd jumps in which often leads to exaggerations and bubbles. One of the current hypes is clearly weight loss drugs. But thinking around the corner, is there an overlooked, more conservatively valued stock to benefit?

Continue reading →
Posted on by

Why it makes no sense to copy Warren Buffett

This is a topic I’ve wanted to write about for a while. Those stock pickers who decide not to migrate to the camp of chartists, tee leaf readers or other witchcrafts, will likely join the group of value investors. In this context, the name of Warren Buffett must not miss. Many investors claim to emulate his strategy, others try to seek inspiration which stocks to buy. Today, I will show that both are delusions.

Continue reading →
Posted on by

My outlook for 2024 – risks and opportunities

The old year closed with a look back (and an interview), the new year starts with an outlook. While it is not my job to try to predict the future per se, I have to make some thoughts and position myself accordingly, which influences my stock ideas – new ones, but also how to handle the published and active ones. This is what I want to discuss – risks, but of course also chances for stock pickers!

Continue reading →
Posted on by

A second look at tobacco stocks after BAT’s gigantic write-down

One the most heavily watched and discussed stocks last week was British American Tobacco after it released a trading update. While the headline read relatively okay-ish, on the following pages they admitted to take a hefty 25 bn. GBP impairment on their US operations with the next earnings. While many see this as a non-event due to not affecting cash flows, I’m looking at it differently. I rather feel confirmed with what I wrote earlier in the year about Altria.

Continue reading →