Hottest Stocks in CW 44/24

In view of the increasing threats posed by cybercrime, providers of IT security solutions should normally be facing an almost overwhelming demand for their solutions. The reality, however, is quite different, at least in terms of the share prices of many companies in this sector. Secunet Security, for example, has seen its share price almost halve over the course of the year and has lost 85 % of its market value since hitting an all-time high around three years ago. In the past few days, however, there has finally been a noticeable rally in its share price. Over the course of the week, it recorded an increase of a good 15 % and since bottoming out in mid-October, it has risen by almost 24 %.

This was due to the publication of the company's results for the first nine months, which included an increase in the sales forecast for the current year. Instead of ‘around €390 million’, slightly over €400 million is now expected to be realised. EBIT, which had risen by 82 % by the end of September, is expected to remain unchanged at around € 42 million due to extraordinary effects.

Top trader Christian Scheid (Scheid) speaks of a ‘turnaround’ against such a backdrop and is of the opinion that ‘a speculative position can do no harm’. However, he himself has not (yet) invested via his model portfolios.

Torsten Maus (TorstenMaus), on the other hand, built up a position in Secunet Security for his wikifolio TREND-SURFER on Friday. In this portfolio, the trader pursues a ‘market-phase-optimised trend-following approach’. More specifically, this involves a classic trend-following strategy according to Darvas, which is supplemented by ‘intelligent market phase optimisation’. In a stable environment, shares are bought that show relative strength and mark new price highs when trading volumes increase.

Although Secunet Security may not yet have reached a new all-time high, there was a clearly recognisable upward trend and certainly a fair amount of strength, relatively speaking. Overall, this was most likely the motivation the trader needed to add the share to the model portfolio he started at the beginning of 2019. After a strong start and a sustained period of flat trading, it is on the verge of reaching new heights. With a manageable maximum drawdown of less than 15 %, the value of the wikifolio has increased by around 8 % on average so far this year.

Companies in the solar energy sector continue to struggle with weak demand and falling profit margins. At Enphase Energy, this was reflected in both the quarterly figures and the financial forecast last week. The American specialist for the development, manufacture and marketing of advanced solutions for residential solar power systems posted earnings per share of $0.65 in the third quarter, significantly below the analysts' estimate of $0.78. At around $381 million, turnover was a good 3% below analysts' projections, representing a year-on-year decline of over 30%. In the current final quarter, the Management Board is only expecting sales of between $360 million and $400 million, which would also fall well short of the analysts' average estimate of $435 million. As a result, there was a double-digit fall in their share price, but at least some of the losses were recouped by the end of the week. This pleased those traders who courageously used the price slide to invest in this stock. A number of them did, as the current trading sentiment shows:

Trading-Sentiment:

Jörn Remus (Nordmann2015) has regularly traded stocks in Enphase Energy in his wikifolio Nordstern Aktien over the past few weeks, with varying degrees of success. However, consistent efforts to limit losses in the event of adverse situations have always prevented any significant negative impact on the portfolio, as a whole. This is one of the reasons why the wikifolio, which was opened a good five years ago, is now trading just below its record high. A price increase of some 132 % means an annual increase in value of around 18 % per year. So far this year, the total gains amount to around 13 %. The maximum loss so far has been 34 %. The most recent purchase of Enphase Energy stocks took place last Friday at a price of €77.63. The trader has allocated a good 3 % of his portfolio to this stock.

The American company Palantir is currently battling against some rather unusual challenges. The company, which supplies various military organisations with artificial intelligence models, entered into a strategic partnership with Israel at the beginning of the year to support the country with technology for the ongoing war in Gaza. According to the company's CEO, this cost the company several employees who were unable to identify with their decision. It has now been announced that Storebrand Asset Management, one of the largest investors in the Nordic region, has also pulled out of Palantir. The reason given for the decision was the concern that by continuing to invest in Palantir, it would violate international humanitarian law and human rights.

However, this has not affected the share price of this company, which specialises in data analysis. On the contrary, at the end of last week, it even reached its highest level since the start of 2021 at around $45. This brings the previous all-time high within reach again. Looking at analysts' assessments, however, the soaring share price is unlikely to last. The average target price according to the banks is just $28.32. To achieve this, the share would have to lose more than a third of its current value. In fact, the most pessimistic estimate puts the stock's fair value at just $9.00. And even the current top price target of $50.00 does not allow much scope for upward movement.

This is perhaps one of the reasons why several wikifolio traders have recently used the rise in the share price to sell and capitalise on their profits. Michael Bichlmeier (AACapital), for example, was able to achieve a price gain of around 72 % in his wikifolio AlphaStars last week through two partial sales. Despite this, the share is still the top holding in the highly successful portfolio with a weighting of a good 7%. The model portfolio, which is based entirely on data-based investment decisions, has grown in value by 220 % over the past two and a half years.

Hypoport, which was promoted to the MDAX a few weeks ago, is not due to publish its figures for the past quarter for another two weeks. However, initial information on the performance of its individual business models was already available in mid-October. Deutsche Bank then gave the online marketplace for real estate financing a ‘buy’ rating and a target price of €318. The analysts expect a long-term growth trajectory with double-digit increases for the company. Our colleagues at Warburg Research also wrote last week of ‘promising growth prospects’. However, as there is no evidence of any positive short-term impetus for the loans, real estate and insurance platform, the fair value was lowered from €335 to €290 and the recommendation from ‘buy’ to ‘hold’. As a result, the stock came under significant pressure, as evidenced by the fall of 12% week-on-week.

Trading-Sentiment:

Some wikifolio traders also pulled the ripcord, as indicated by the overhang of Sells in Hypoport over the past seven days. Thomas Ronacher (jopo) divested himself of Hypoport stock last Thursday. He had to accept a loss of 20.5 % for his wikifolio United Trade Center. The model portfolio, which was opened two and a half years ago, is nonetheless trading at an all-time high with a share price increase of around 40 %. The sale was part of his established risk management strategy, as the following comments explain: ‘Unfortunately, it was no longer justifiable to hold Hypoport stock in this wikifolio. The predefined loss threshold of minus 20 % had been reached and the position was therefore sold. Following another downgrading by analysts, there is no other positive news for the real estate, financing and insurance platform at present. At the end of September, the position was increased with reference to the ‘technical momentum’ and the ‘more favourable financing environment with the already implemented and upcoming interest rate cuts by the ECB’. Now the tide has turned, and the trader has drawn his conclusions. The freed-up capital has been allocated to three stocks, so that the broadly diversified and fully invested model portfolio currently consists of 48 shares, three ETFs and six participation certificates (all in the commodities segment).

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