Hottest Stocks in CW 51/23

For quite some time this year, BASF stocks were not amongst the major high-flyers. At the end of October, however, the DAX share then embarked on an impressive race to catch up, rewarding shareholders with an increase of over 20% year to date. In the past week alone, its share price has risen by almost 7%. This rapid growth has been fuelled in part by positive analyst comments. UBS, for example, has significantly increased its profit estimates for the chemical company until 2025 and has changed its recommendation from "sell" to "buy" with a target price of €55 (previously: €40).

In the current year, BASF has had to revise its targets several times, due to weak demand and also high energy and personnel costs. Given the current outlook for the economy, there is not expected to be a significant upswing the coming year either. However, the recent share price performance could indicate that a lot of the negative news has already been factored in. wikifolio traders, most of whom have recently added this stock to their shopping list, probably share this view. Last week, for example, Matthias Becker (MatBeck) added BASF to his wikifolio HB Marktführer which focusses on stock from companies which he believes are market leaders and which is currently trading just below its all-time high.

Brown & Brown's share price, which had risen by nearly 40% year to date, has undergone a noticeable correction in recent days. Over the course of the week, the insurance brokers, who specialize in risk management, dropped over 7% in their share value. We have not yet been able to identify the underlying reasons for this abrupt turnaround. In the middle of the week, the group announced the acquisition of R McGee Insurance Brokers, a broker for private and commercial insurance. There were also a few comments from analysts, but these were not particularly negative in tone. It may therefore simply have been a typical case of speculative profit-taking that triggered the price slide. Some wikifolio traders have subsequently used the price drop to jump on board. A look at the trading sentiment shows the clear buyer preference at Brown & Brown:

Trading-Sentiment:

Varta's share price recovered significantly again last week. After the stock bottomed out at around €14 in May, the share price quickly bounced back and rose to over €23. This rebound was put under pressure again in November before profit-taking resumed again. Despite the recent more favourable trend, the stock is currently in danger of a double top chart pattern. This would be in line with the comparatively sceptical stance of analysts.

Christian Scheid (Scheid), who has been very successful with his wikifolio Special Situations long/short for many years, already warned against investing in Varta a month ago. "A glance at the quarterly report reveals just how bad Varta's balance sheet is. I assume that the battery manufacturer will not be able to avoid a cash injection in order to improve its financial situation and I therefore continue to strongly advise against investing," wrote the experienced financial journalist after analysing the company's Q3 figures published in mid-November. The stock has been experiencing a noticeable tendency to being sold over the last several weeks.

The rumoured agreement between the German "traffic light" government on the financing of the 2024 federal budget has also left its mark on the stock markets. After the Minister for Trade, Robert Habeck, announced "painful cuts" for the solar industry in an initial statement, there were instances of huge stock sell-offs in relation to some of the affected players in this sector. SMA Solar, which is listed on the MDAX, was also hit, but was able to recoup its losses the following day. There had been speculation on the market that savings would be made, particularly regarding the funding of new locations within Germany. However, the group, which specialises mainly in inverters, had already announced shortly beforehand that it intended to set up a new production facility in the USA. Companies there will receive significantly more financial support.

A report in Wirtschaftswoche raised new uncertainties, however, by mentioning an item on SMA Solar's balance sheet which throws up some questions relating to substantial research costs. wikifolio trader Maximilian Steppan pointed out in his editorial on Friday that the journalist responsible for the article, Melanie Bergermann, had also reported on Wirecard, Ströer and Adler in the past. Some wikifolio traders probably preferred to play it safe with this amount of uncertainty and sold their stock.

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