Weekly update: Mixed macro figures

Investors fear that interest rates will not go down this year, as was previously expected. Strong macroeconomic figures confirm economic growth, which is why some members of the American central bank (FED) would prefer to see an interest rate increase of 0.75% to quickly reduce inflation. Investors do not want to see such interest rate increases and we see this reflected in falling prices as a result. Why banks are also falling is a mystery to us, because banks actually benefit from rising interest rates. According to the Aandelenondereentientje team, it is a healthy cooling down because the stock markets are far ahead of the facts. Periods of profit-taking and doubts are then no more than normal.

In Germany, the purchasing managers index again contracted. The index fell from a level of 47.3 to 46.5 (A level above 50 means growth, below that means contraction). The European services sector, on the other hand, showed clear growth and rose to a level of 53, while last month a level of 50.8 was still on the boards. All in all, these were mixed figures that offer little support to investors. It doesn’t matter to us, we already buy shares under ten euros that are dirt cheap in our eyes.

We are currently working on a stock that we could buy for three quarters. It is quite a strange story and just this week all kinds of news came out that drove us back to the drawing board. But the most beautiful flowers grow along the edge of the ravine, so if we are going to pick them, you will be the first to know with an extensive analysis. For now time to discuss our portfolio.

Wallet

Algoma Steel Group Inc.: A few weeks ago we emailed you that we sold more than half of the shares (250 out of 400) and cashed in a nice profit of over 30%. A good choice, the share price has dropped a bit. But is that justified? The steel group recently reached a new milestone in the construction of its production facility in Sault Ste. Marie for so-called electric arc furnaces. The group’s project is the largest carbon reduction project on an industrial scale, because electric arc furnaces run on electricity. It is supported by both the governments of Canada and Ontario because it is part of the critical energy infrastructure. Given the importance of Ontario’s carbon reduction goal, the company is pleased to celebrate this important milestone and the Premier of Ontario even came to take a look. Combined with Ontario’s low-carbon electricity grid, the company expects that this transition will position Algoma as one of the leading producers of “green steel” in North America. The group is growing well and our team of analysts has full confidence in this company and is therefore holding the remaining 150 shares very firmly.

SunLink Health Systems, Inc.: this company has a number of hospitals and pharmacies plus a piece of land to develop them! The stock was still at a price of $4.83 a few years ago, to slide back for no reason to a current price of around $1.07. A new round seems to be on the way! The stock has already been somewhat lower, but when we tipped this stock at $0.85, it rose more than 20% to a price of $1.07 now. However, we have higher expectations for this stock. The company came up with strong figures and showed a profit per share of $0.28, while a loss of $0.09 per share was realized last year. The consolidated net income increased by more than 38.2% to an amount of $14.393 million, versus $10.411 million a year earlier. Our team of analysts is therefore very pleased with this and we are surprised by the lackluster price reaction to the figures. We are holding on to the shares firmly.

MotorK: hats off to the investors who bought this stock in time and now have a profit of around 25% on paper! MotorK seems to be coming out of the deep valley, but still has a long way to go. We indicated to buy limited shares of the stock, but we doubt whether all investors in this stock have done so. Fortunately, the price of the stock remains nice and firm, but smart purchasing requires discipline and patience. We aim for a higher price than the current one, keep an eye on our updates.

Finally, the portfolio overview:

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Analyse

We jump on the moving train…!

Yesterday we saw Avantium shares bounce back after a buy recommendation was issued. We are not hesitating, but are jumping on the train that has just started moving. The share has suffered greatly due to a large issue in which approximately €70 million was raised. Investors were disappointed and the price has collapsed! But what investors are overlooking in their frustration is that Avantium’s management has raised more than enough capital to finish their flagship, the FDCA factory in Delfzijl. A number of very large companies have committed to purchasing the promising bioplastic or to producing it under license. This indicates that this is a potentially groundbreaking product. The share is trading almost at its lowest point of the year and now that the financial position is in order for the foreseeable future, the risk-return ratio seems to have improved to such an extent that speculative investors can consider an investment. According to the initial planning, the FDCA plant in Delfzijl should be operational by the end of 2023, but the misery on the labor market – combined with the sharp increase in inflation – threw a spanner in the works. Not only did the delivery date have to be postponed (to the second half of 2024), but additional financing was also needed. With the completion of the recent €70 million issue, the financing is now completely in place; management expects to have sufficient liquidity well beyond the moment that the plant will be operational. If the plant in Delfzijl is successfully operational in the second half of the year, management expects to be able to achieve a turnover of around €100 million in 2026, with the EBITDA coming in around zero. This means that from that moment on, no more money will be spent – and Avantium therefore no longer needs to issue shares. In addition to two neutral recommendations, all other analysts have the share on “Buy”. The lowest and highest price targets are €2.40 and €9.57 respectively. The average price target is €5.24. Once the construction of the factory in Delfzijl is completed, it will be the first commercial FDCA factory in the world. If it succeeds before the end of the year, the share price will undoubtedly attract a lot of interest with sharply rising prices. Avantium has a market capitalization of only €170 million at the current price, but anyone who knows that the potential market is hundreds of billions also knows that there is a lot to be gained for the speculator. According to our expectation, the share price potential is between 100 and 400%, because if the FDCA factory in Delfzijl lives up to expectations, price targets of well above €10 can quickly be considered. We buy 1200 shares at €2.30 each. Author has position

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03/04/2025

Update

We bought Deceuninck for €2.27: Discover the latest developments

In this video, Rick van Zelst discusses Deceuninck stock, a leading company in the plastics sector. Sharesunderonetientje bought this stock at €2.27, and now it is around €2.45. Thanks to an optimized production process and signs of recovery in demand for plastics production, Deceuninck offers potential for significant margin improvement. Is this stock still worth it for your portfolio? Watch the video and judge for yourself!

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03/04/2025

Update

Today we saw another increase on our top purchase, which now brings us towards a 25% profit.

HelloFresh (HELFY) saw a remarkable 13% rise on the Frankfurt stock exchange after announcing its second-quarter results that beat expectations. Despite a 3.1% drop in orders to 28.9 million and a 3.5% drop in meal deliveries to 243.8 million, the company still managed to impress. This was thanks to an impressive 5.4% increase in average order value to €67.10, which more than offset the volume declines. The Berlin-based company highlighted that this was the twelfth consecutive quarter of growth in average order value. This growth was mainly driven by a higher contribution from ready-to-eat products, an increase in premium and customizable meals, and a broader inclusion of market items. In addition, HelloFresh reduced price incentives in several product categories. HelloFresh also took significant steps to improve its production capacity, which however resulted in one-time, non-cash write-downs of €45 million in the first half of 2024, of which €32 million in the second quarter. Despite a 23% year-on-year decline in adjusted EBITDA to €146.4 million, the consensus estimate of €123 million was exceeded. Stocksunder100 see HelloFresh’s Ready-to-Eat (RTE) business performing strongly, now accounting for around a quarter of total group revenue. Free cash flow also remains strong, despite the second quarter historically being a period of lower volume. If you’ve already stocked up big, it may be wise to take a small portion of the profits. However, we believe the stock has even more potential and therefore choose to hold the full position.

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03/04/2025

4.3/5