Perennial Gainers: These Shares Remain Unscathed Despite Market Fluctuations
Cashing in on the Past Year's Stock Superstars: A Simple Strategy to Boost Your Portfolio
Ready to ride the waves of success with the stocks that have been making headlines lately? Here's a simple strategy that could help you amplify your returns.
Each year, let's take a peek at the five DAX stocks that have witnessed the most significant price hike in the past twelve months. We then equally weight these selected titles and hold them for a mere twelve months. (Note: This is a simplified approach and may not account for optimal diversification strategies.)
According to our team's simulations, this strategy has outperformed the DAX a whopping 17 times in the past 20 years, with an average edge of five percentage points. Even when considering transaction costs, there's still a clear excess return to be gained!
Let's dive into the stars of the moment.
The Comeback Kid: Siemens Energy
With a more than 300% surge this year, Siemens Energy is a turnaround story you can't ignore. Despite a previous dip due to issues in the wind power business, the company is on track to break even in the 2023 financial year. Its order backlog in crucial segments, like gas services and grid technology, significantly exceeded revenues, hinting at long-term growth drivers.
The Arms Race Victor: Rheinmetall
Due to the Russian attack on Ukraine and the subsequent need for NATO countries to update their aging weapon caches, Rheinmetall is benefiting from a massive order surge. Analysts project that this Düsseldorf-based defense company's net profit will more than double in the years 2024 to 2027. Despite the share price increase, the company is still moderately valued compared to its American counterparts.
The Tech Titan: SAP
SAP, a software powerhouse, thrives on the megatrends of cloud computing and artificial intelligence. Investors are willing to shell out high valuation multiples for such innovative companies. Following a strong quarter, Walldorf-based SAP recently raised its annual forecast. With 84% of revenues now more predictable, the company is better equipped to weather economic storms.
The Maintenance Marvel: MTU Aero Engines
With aircraft manufacturers Airbus and Boeing delivering fewer planes, airlines must rely on older jets that require regular maintenance, increasing the demand for spare parts. MTU Aero Engines, based in Munich, sells fewer turbines but rakes in more profits due to the lucrative spare parts business. The company might even break the billion-dollar adjusted operating profit barrier this year.
The Battle for Power: Commerzbank
The Commerzbank is under the radar due to Italian competitor Unicredit's unexpected interest in acquiring a stake in the Frankfurt-based bank. If Unicredit wishes to fully take over, it might have to pay a handsome premium. If the bank remains independent, it'll put pressure on the management to improve key figures.
Want more?) Head over to BÖRSE ONLINE's print issue 45 for the full scoop or check out AI predicts which stock will grow the most in 2025.
Conflict of Interest DisclosureThe publisher Börsenmedien AG's board and majority shareholder, Mr. Bernd Förtsch, holds direct and indirect positions in the financial instruments mentioned in this publication, such as Commerzbank.
Investing in the stocks highlighted here, such as Siemens Energy, Rheinmetall, SAP, MTU Aero Engines, and Commerzbank, could potentially boost your portfolio as they have demonstrated significant price hikes in the past year. Following the strategy of equally weighting these stocks and holding them for a year might help amplify returns, though optimal diversification strategies may not be accounted for.
