An Undervalued German Stock – April 2019

Scandal = Opportunities?

I’ve always love a good corporation scandal news on large publicly traded companies. I am NOT talking about Jeff Bezos (Amazon)Naked Pictures which surface back in March 2019. Let me present you four different cases of cooperation  scandal which devalued the companies in a short period of time.

Emission Scandal

Do we remember the Volkswagen Diesel Emission scandal back in September 2015? The shares dropped over 60% in less than 60 days and still not recovered to glory days. From its bottom value, the company reputation is definitely tainted and recovery would take years before regaining investors trust again.

Data Scandal

How about the FB data scandal which happen in after April 2018? A slow degradation of FB shares followed for at least 6 months. Despite the troubles, Facebook was still making money from its top three platforms (FB, Instagram and WhatsApp). Despite many departures from top executive, the company stayed resilient and focused on its customers requirement and push for change. Not Recovered fully and still in the process of healing its wounds.

Security Scandal

The the third scandal I would like to present is the UK Telecom Talk Talk security scandal. The company has struggled to recovered since and shrunk to 25% worth in less than three years.

Accounting Scandal

Next is GE, one of the largest company in the world shrinking to one third its size and unable to seek recovery. Poor management can easily destroy reputation which takes more than a century to build.

We want a Profitable Scandal!

So now we have observe two good case and two bad case. Both FB and VW have recovered dramatically, however GE and Talk Talk have not recovered in the last few years. The reason for this is down to its financial health. 
 
According to the four charts below, Facebook seem to be growing at an aggressive rate. VW, despite the fines are still growing slowly but surely. Both GE and Talk Talk seem to be on the decline.

An Undervalued German Stock with a hint of Scandal

Most readers knows that I am advocate believer of cashless transaction companies and have written many articles previously.
 
  1. The next Big Tech Stock – 3rd November 2017 
  2. How to find the next Amazon Share Issue 2 – 24th June 2018 
  3. Next $15bn Company – 5th June 2018

Yes, the undervalued German stock which I am about to reveal next is a Cashless Transaction Tech stock.

Most readers knows that I am advocate believer of cashless transaction companies and have written many articles previously.
 
  1. The next Big Tech Stock – 3rd November 2017 
  2. How to find the next Amazon Share Issue 2 – 24th June 2018 
  3. Next $15bn Company – 5th June 2018

This stock is currently under-fire since Jan 2019, for financial scandal. This have not been proven but share price already reflect that.

Lost 40% in 30 days since the scandal.

Revenue and Profits are growing 50% each year for last 5 years

Softbank agrees to the undervaluation and invested nearly £1bn in April 2019

A company with an amazing disruptive technology

The Reveal!

WireCard [WDI.DE]

WireCard is a global financial technological company who offers digitisation, mobile payments and e-commerce to clients. The company offers transaction solutions as well as risk management and processing of physical and virtual cards.

The company is in collaborations with Google Android phones in major European countries. They have licenses with Visa Mastercard, Amex, Alipay, We Chat and many more. They also collaborate with 250,000 different companies and brands with their technology.

 

 

An Unproven Scandal

Financial Times have published an article back in Jan 2019 on the undeclared profit from three sources in the far east which boost its profits significantly. This rolled further into suspected forgery and fraudulent accounting which triggered police investigations too.

Hero or Villian?

This could go both ways! If the Financial Times acusation is incorrect or the severity overblown, the share price of this undervalued german stock is certain to take off.

However, if the scandals was true, the share price would drop near the 50 Euros per shares at PE ratio of 20-30.

This is still a risk for many to consider. Double Up or Double Down?

Explosive Growth

The financial P&L paints the picture of the aggressive growth in this company.

To Buy or Not To Buy?

I have tried my best to present a pictorial presentation with minimal words to express my excitement with this company. A great investment opportunities filled with unpleasant uncertainties. 

Financial Times are also a forced no to reckon with. Their probability accuracy of reporting informations to defame a company based on research facts is very high.

I am recommending to buy this stock ONLY if you class the risk as Very High. Never hold more than 10% of this stock in your overall portfolio. Only invest in this gem only if you have a stable diversified portfolio to reduce the risk further.

Yes, I have personally taken this Risk and invested with WireCard for a long term view recovery and further growth.

 

Please do leave a comment if you have enjoyed my article!

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