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Grand Final: Final quarter of 2020: Which stocks offer the best opportunities | message

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by Sven Parplies, Euro on Sunday

E.An impressive number: According to estimates by the financial service Bloomberg, Apple will sell 221 million iPhones over the next twelve months. The start is critical: Due to the corona pandemic, production is stalling, the devices arrive in stores later than usual. The Christmas business doesn’t seem to be in danger. In the 2019 financial year, the group generatedn around a third of sales and profits in the monthsn October to December. The iPhone was clearly the biggest budget item.

The Christmas season is particularly important for the economy. Many consumers go shopping before the festival, but companies also often place large orders at the end of the calendar year. The German gross domestic product is therefore regularly the strongest in the fourth quarter. Trade and consumption in particular benefit from the boom. The trade association HDE calculates that sales in November and December are around 15 percent above the level of the other months. Because many companies lost their sales due to the pandemic, especially with the state-mandated lockdown in spring, the Christmas season 2020 is more important than ever.

More than 90 percent

One of the comeback candidates is the Ceconomy retail group with its Saturn and electronics stores Media Markt. During the pandemic, more than 85 percent of the shops were closed. The doors have now reopened, but online sales are still picking up. Since Ceconomy’s business year ends in September, the Christmas quarter is about laying a strong foundation for the new section. Most recently, the group generated more than half of its operating profit in the Christmas quarter.

The conditions at the Cewe Foundation are even more extreme. The photo service provider regularly generates more than 90 percent of its profit in the final quarter. Photo books or calendars with pictures as gifts are popular during the Christmas season. In the rest of the year, the income is at best enough to make it into the profit zone. Bankhaus Lampe sees the Christmas business as a key catalyst for Cewe shares again this time.

The Christmas season should also bring redemption to the media group ProSiebenSat.1. The weeks leading up to the festival are particularly popular with advertisers. In a normal financial year, around 50 percent of the adjusted annual operating profit is earned from September to December, emphasizes ProSiebenSat.1 in its outlook for the rest of the Corona year.

The online fashion retailer Zalando is not only benefiting from the approaching Christmas, the change in weather also brings a breath of fresh air. “The autumn and winter collections are typically sold at higher prices than the spring and summer goods,” says Zalando, explaining his typical seasonal pattern. In addition, the fourth quarter, like the second, is usually stronger because you don’t have to advertise so aggressively with discounts during this phase of the year.

Adidas is a completely different extreme. The sporting goods company generates more than 90 percent of its operating profit in the first nine months of the year. The crash on the home straight is intentional: In the final quarter, investments are regularly ramped up. That lowers the margin. But it should be enough for a quarterly profit this year as well.

Manage risk

From the point of view of investors, strong seasonal fluctuations bring additional risks because the business development is more difficult to calculate. A renewed escalation of the corona crisis in the run-up to Christmas, for example, would have drastic consequences. Those who can are setting up their business more broadly: The software company SAP, which concludes a large part of its license sales shortly before the end of the year, is increasingly relying on subscriptions. Instead of large income payments, smaller amounts are regularly poured into the cash register. The proportion of “more predictable sales”, which also includes software support, is now over 70 percent.

At Apple, too, services have continuously gained in importance. Most recently, this area, which also includes subscription offers for music, for example, has already contributed a fifth of total sales. At the same time, the product calendar is stretched. The company has at least slightly reduced the gap in the delayed iPhone launch this fall with a new version of the watch.

By the way – regardless of the specific stock selection – stock market operators have good reasons to look forward to the final quarter: The months from October to December have historically brought the DAX the greatest price gains.


INVESTOR INFO

In the two weeks before the presentation of a new iPhone, the Apple share developed above average, according to Bloomberg statistics, then weakened slightly. Investors should think long-term: Apple’s ecosystem and enormous financial power give the company the chance to play a dominant role in the digital revolution in the long term. The growing sales of services make the business more predictable. As a provider of the digital age, Apple remains a basic investment!

During the Corona lockdown in spring, Ceconomy’s electrical stores Saturn and Media Markt had to close most of their stores. At the same time, however, sales via the Internet have increased significantly during the pandemic. The online business generated more than a third of total sales in the months from April to June. Black Friday and Christmas should get business moving towards the end of the year. The share listed in the SDAX remains a turnaround speculation.

Many advertising customers scaled back their activities during the Corona crisis. The run-up to Christmas gives ProSiebenSat.1 with its TV stations the chance to make up at least part of the revenue losses of the first half of the year. Regardless of the annual finale, the MDAX-listed share has two potential price drivers: hidden values ​​in the Group’s Internet holdings and takeover fantasy by major shareholders such as the Italian Mediasat.


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