Commerzbank AG, Infineon Technologies AG, and 4 Other TOPS and FLOPS from the German Stock Market Last Week
First, the TOPS:
1) For the second week in a row, LANXESS AG (ETR:LXS) (FRA:LXS) is a top stock on the DAX. Not only did it rise 7.22% on Wednesday, the best one-day performance of a DAX stock this week, it also was up 11.2% for the week overall, by far the best weekly DAX performer. While the previous week’s rise occurred on very little news, this week’s was far more justified: The company is projecting its EBITDA before exceptional items will be higher than previously anticipated for fiscal year 2014. CEO Matthias Zachert credited stronger-than-expected December rubber orders as well as some lower raw materials costs.
2) Chipmaker Infineon Technologies AG (ETR:IFXA) (FRA:IFXA) was the second-best DAX performer last week, up by just over 5%. On Thursday, the company reported better-than-expected first quarter results and raised its guidance for the year, citing a strong dollar and high demand for power management and security chips. While most people think of “microchips” as being computer components, Infineon’s chips are used in many other devices, including air bags, air conditioners, and washing machines.
Even with the jump, shares were only trading at about 17 times forward earnings as of market close on February 2, below the industry average of 23 times earnings, so this may represent a buying opportunity.
3) Shares of XING AG (ETR:O1BC) (FRA:O1BC) hit all-time highs last week after the company announced that it had acquired all shares of Intelligence Competence Center, the largest job-search site in the German-speaking world. The company’s self-named social media platform for professionals is already almost exclusively used by German speakers, with 90% of searches coming from the DACH region of Germany, Austria, and Switzerland, so the purchase seems to be a natural fit.
And now, the FLOPS:
1) It was a rough week for Europe’s largest engineering firm Siemens AG (ETR:SIE) (FRA:SIE), which announced last Tuesday that profits were down 25% in its first quarter to 1.1 billion euros. While CEO Joe Kaeser blamed slumping sales to the energy industry, driven in part by falling oil prices, he did defend the company’s purchase of Dresser-Rand, which services the oil and gas industry. “The growth trend, the demand, is still intact,” he said, adding that he still expects full-year profit to increase by 15%.
Despite his optimism, however, the executive in charge of the Power and Gas division is stepping down, and the company may have to lay off workers in an effort to trip 1 billion euros in costs. However, if you own shares, I don’t see any need to panic: While the drop erased the gains of the last two weeks, it’s still well up from its mid-October lows.
2) Commerzbank AG (ETR:CBK) (FRA:CBK) fell victim to the aftermath of the Greek elections, dropping sharply last Monday and Tuesday. New Greek Prime Minister Alexis Tsipras’ policies may include a Eurozone exit or debt default, neither of which would leave Eurozone banks unscathed. Commerzbank ended the week down 6.61%, the second-biggest drop of the DAX.
Is it a buying opportunity? I’m not sure. Commerzbank’s stock has been all over the place over the past year, and bank financials are notoriously tough to evaluate. I will say that it is trading near the bottom of both its one- and five-year ranges, so if you are planning to buy, I think this is as good an entry point as any.
3) Normally, I’d “save the best for last,” but in this case, I’ve decided to do the opposite and close with what I’m calling an Uberflop. There’s just no other way to describe the disastrous week that shares of SMA Solar Technology AG (ETR:S92) (FRA:S92) had. Germany’s largest solar company announced it would cut 1,600 jobs, or about 1/3 of its workforce, due to continued slackening demand. Additionally, the company doesn’t expect to return to profitability in 2015. Shares were down a jaw-dropping 15.2% last Tuesday, and the bloodletting didn’t stop on Wednesday, as shares dropped another 8.5%, or Thursday, sinking an additional 4.85% to an all-time low. Even with a slight rally of 4.72% on Friday, the stock was still down 22% for the week. And to think that back in March 2014, it was pushing 50 euros/share!
I only have two things to say: 1) Ouch! 2) If you are bullish about the long-term prospects of solar energy, I doubt the price of this stock will get much cheaper and so you may want to buy in now…but you will likely have a long wait before the price recovers.
Der Bärenmarkt-Überlebensguide: Wie du mit einer Marktkorrektur umgehst!
Ein erneutes Aufflammen von Corona in China, Krieg innerhalb Europas und eine schwächelnde Industrie in Deutschland in Zeiten hoher Inflation und steigender Zinsen. Das sind ziemlich viele Risiken, die deinem Depot nicht guttun.
Hier sind vier Schritte, die man unserer Meinung nach immer vor Augen haben sollte, wenn der Aktienmarkt einen Rücksetzer erlebt.
John Bromels owns none of the stocks mentioned. The Motley Fool does not own any of the stocks mentioned.