My method for determining the fair price of a share

Reading time: approx. 12min

1. ) INTRODUCTION

I recently asked you on Getquin to vote on which topic I should address in one of my future articles. About 65% of you voted that the topic of "fair share price" should be addressed and therefore requested a contribution on this topic.

The question of what constitutes a fair price is indeed initially subjective. A common definition is that the fair price of a share is the sum of its discounted cash flows [1]. This definition is also the basis for the well-known discounted cash flow method (DCF method) [2], which assumes a growth phase and a terminal phase and discounts all future cash flows to determine the fair value of a share. What exactly "discounting" means and how to apply it will be explained later in the article.

Before I explain my method in detail, however, I would like to mention some limitations. My method is just one method among many and not the method with which you can determine the exact value of a share in 10 years to two decimal places. Every method makes assumptions and, in case of doubt, is only as good as the assumptions that are made. Such models also react very strongly to small changes in the input values, so that a change in the interest rate from 5% to 3% can already lead to considerable changes in the final result.

It is therefore always advisable to make rather pessimistic (or at least realistic) assumptions in all analyses and always deduct a margin of safety at the end.

2.) FREE CASH FLOW

The method is based on the estimate of the free cash flow of a company over the next few years. Free cash flow is a popular key figure among investors, as it indicates how much of the operating cash flow (= money generated through business activities) is actually available to investors. Free cash flow can be calculated from a company's cash flow statement, for example, in which the operating cash flow the so-called capital expenditures (capex) from the operating cash flow:

Free cash flow = operating cash flow - capex

Capex includes all capital expenditures "for longer-term assets, such as machinery, buildings, but also original equipment, spare parts, computer systems" [4]. Fortunately, we can read both operating cash flow and capex from a company's cash flow statement. I use free cash flow for my method because free cash flow is less influenced by accounting subtleties than EBITDA, for example.

For the method presented here, it will be important to estimate a company's free cash flow for the coming years. Like any estimate, a free cash flow estimate is of course not error-free and is subject to uncertainties. We also want to keep the estimate as simple as possible. I estimate the free cash flow as follows:

EBITDA

- Capex

- Taxes

+ Stock-based compensation

= Free cash flow

This is an estimate that can be used to get a pretty good idea of a company's free cash flow. Many small details that play a role in the cash flow statement have not been taken into account here, but in most cases these are not so important. As a reminder: we wanted a simple and robust estimate of the free cash flow.

Now that we have a way to estimate free cash flow from EBITDA, let's go one step further and get to the valuation of a company based on free cash flow. I personally like to use the so-called free cash flow yield. The free cash flow yield is obtained by putting the free cash flow generated in a year in relation to the market capitalization (=price):

FCF Yield = FCF / Marketcap = (FCF/share) / (price/share)

The FCF Yield indicates the percentage of market capitalization generated annually by the free cash flow. The higher the FCF Yield the lower the lower the valuation. Microsoft, for example, is valued at $MSFT is valued at around 2% FCF Yield, Apple $AAPL with 3.4%, Exxon Mobil $XOM with 9% and British American Tobacco $BATS with 19%. Microsoft's business model is seen as low-risk, secure and with recurring revenues, whereas British American Tobacco currently has so many risks and shrinkage scenarios priced in that it has such a high FCF yield.

The FCF yield with which a company is valued depends in particular on the security of the business model, the future growth prospects and the existing risks. This can of course change over time: at the beginning of the 2010s, Microsoft was still valued with an FCF yield of around 10%. In the case of a declining FCF yield, we speak of a multiple expansionas the company's cash flows are seen as increasingly secure. If you had bought Microsoft at a 10% FCF yield and Microsoft was still generating exactly the same cash flow today as it was at that time, at today's valuation level (2% FCF yield) you would still have quintupled the original investment quintupled.

3.) MY METHOD

The basis for any earnings or losses of a company is initially always the turnover: if this increases, there is a chance of earning more money in the future; if it decreases, it becomes more difficult to earn more money. How much profit a company makes can be measured by the so-called EBITDA (earnings before interest, taxes, depreciation and amortization). The ratio of EBITDA to sales is known as the EBITDA margin. If a company improves its EBITDA margin, it becomes more efficient, with proportionately more EBITDA remaining from every dollar earned. As mentioned in the free cash flow section, we can estimate free cash flow from EBITDA using capex, taxes and stock-based compensation.

Example: A company generates € 1,000 in sales and achieves an EBITDA of € 400. In addition, capex of € 100 and taxes of € 50 are incurred. The company spends €5 on stock-based compensation. The company then has an EBITDA margin of 40% and an approximate free cash flow of

FCF = € 400 - € 100 - € 50 + € 5 = € 255.

If the company's market capitalization is currently €10,000, it would have an FCF yield of €255/€10,000 = 2.55%.

If we now estimate the future sales growth, the future EBITDA margin, the future expenses for capex, taxes and stock-based compensation, we can estimate the future free cash flow. If we can then estimate the FCF yield with which a share can be sold in X years, we can estimate the future market capitalization of the company. If we also take into account the number of outstanding shares and any share buybacks by the company, we can also estimate the price per share in X years.

4.) EXAMPLE: PHILIP MORRIS $PM

To better understand the method, it is advisable to look at a concrete example. I have specifically chosen Philip Morris $PM. Before we start, however, it is important to define the investment period. Since I want to invest for the long term, I set the investment period at 10 years. This is completely arbitrary at first, but in general, the shorter and longer the period, the greater the inaccuracies. With shorter periods, we are subject to excessive cyclical fluctuations in the free cash flow and with longer periods, the model becomes less accurate due to the high sensitivity.

Warning: a lot of figures and estimates follow, which can only be put into a suitable format here on Getquin to a limited extent (to put it euphemistically). I have attached a screenshot of my personal Excel sheet so that you can better understand a lot of things there. The following data is taken from [5]:

i. The inventory (TTM, all figures in millions):

Market capitalization = USD 145,040

Number of shares = 1.551,1

EBITDA = USD 13,449

Capex = USD 1,357

taxes = 2,428 USD

Stock-based compensation = 0 USD

ii. Calculation of free cash flow & margins:

Free cash flow = 13,449 - 1,357 - 2,428 + 0 = 9,664 USD

EBITDA margin = 39,2%

Capex / turnover = 4,0%

Taxes / turnover = 7,1%

We now have an overview of the actual state of Philip Morris. We now want to estimate what these figures will look like in about 10 years. We estimate this:

Sales growth (annually)

EBITDA margin (in 10 years)

Capex / sales (in 10 years)

Taxes / sales (in 10 years)

Share buybacks in % (annually)

Stock-based compensation / EBITDA (in 10 years)

As we can see, we have to make a number of estimates here which, depending on how they turn out, can have a massively influence the final result. If we are too optimistic, we can calculate almost any future price, no matter how high. If we are too pessimistic, almost any price today will be too expensive.

iii. The development of the company:

A real treatise on my assessment of Philip Morris' corporate development would be too extensive at this point and would be enough material for a separate post (feel free to comment if you wish). Therefore, here is the short version of my assessment:

Philip Morris is struggling with the declining volume of cigarettes. For years there has been a decline in volume of around 2% annually, which has so far been offset by price increases. In principle, I assume that sales of cigarettes will decline by around 1% per year over the next 10 years. In the area of risk reduced productshowever, i.e. IQOS and snus in particular, Philip Morris will grow by 15-20% annually and IQOS is set to enter the US market in 2024. The management itself expects overall Group sales growth of 7-9% per year.

The new risk-reduced products also have a higher margin than traditional cigarettes, meaning that the EBITDA margin can even be expected to increase slightly in future as their share of total sales grows.

The last few years have been characterized by high investments (=capex), especially in the new product categories. The products are now ready for the market and we are entering a phase in which there will be slightly less capex. I also assume that tax expenditure will be around the average of recent years and that share buy-backs will resume as cash flows increase and investments decrease.

Overall, my long-term estimates are

Sales growth = 7% annually

EBITDA margin = 42%

Capex / Turnover = 3%

Taxes / turnover = 7.5%

Share buybacks in % = 0.3%

Stock-based compensation / EBITDA = 0%

iv. possible price in 10 years:

A little percentage math and a few Excel formulas later, we see that in 10 years, Philip Morris is estimated to be worth 21,241.1 million USD in free cash flow in 10 years. In addition, the number of outstanding shares has increased to 1.505,8 shares outstanding.

Philip Morris is currently valued at an FCF yield of 6.9% is currently valued. If the valuation does not change in 10 years, the market capitalization in 10 years will be USD 307,842 million. If this is divided by the number of shares outstanding in 10 years, the price per share is approximately 204 USD. At the current price of around USD 90, this would correspond to an annual return of around 8.6% would correspond.

This does not take into account a possible multiple expansion/deflation, i.e. an increase/decrease in the FCF yield. Furthermore, we still have to discount the future share price in order to determine the fair value today.

5.) FAIR VALUE WITH MARGIN OF SAFETY

The last variable to be included in our estimates is the so-called risk free rate comes into play. This is the risk-free or low-risk interest rate that you receive, for example, for investments in government bonds, fixed-term deposit accounts or similar. For example, if you receive 5% per year for a 10-year investment in a fixed-term deposit account, you would have to invest around €614 today to receive €1,000 after 10 years: the money you receive in 10 years is discounted at 5% per year. discounted annually (614€ = 1.000€ / (1,05)^10).

In the same way, we must also discount the future share price, as we could also invest the money today at a fixed interest rate for 10 years. Of course, there is a lot of leeway in the valuation: if we assume a low risk-free rate, today's share prices will automatically increase; if we assume a high risk-free rate, today's share prices will decrease. Incidentally, this is also the reason why the stock market generally reacts sensitively to changes in interest rates.

If we assume (conservatively!) an average risk free rate of 6% we obtain the current fair value of Philip Morris:

204 USD / (1.06)^10 = 114 USD

After all the estimates, calculations and discounting, we have now arrived at a fair value of 114 USD per share. However, as already mentioned several times, this is a model that makes many assumptions, estimates and idealizations. It is therefore always advisable to apply a margin of safety should always be deducted. I deduct a flat rate of 20% from my calculated fair value, resulting in a total value:

Fair value w/ MoS = 91 USD

This value is fairly close to the current share price of around USD 90 / share, so that our estimates and assumptions should not be too far off the mark.

To conclude this section, here are a few examples that show how sensitively our model reacts to changes in certain estimates. All examples assume that the other estimates/parameters remain the same:

• 3% risk free rate --> fair value 152 USD
• 2% annual share buybacks --> fair value 134 USD
• 9% sales growth --> fair value USD 137
• 38% EBITDA margin --> fair value 99 USD

6.) SUMMARY & OUTLOOK

Based on the current company balance sheet and our estimates for the company's development, we can use this method to determine a fair value for a share. A possible multiple expansion/deflationi.e. a change in FCF yield in 10 years. In the screenshot attached to the article, you can get an overview of how this parameter influences the valuation today (return distribution).

If you are interested, I can provide you with a corresponding Excel template. Just comment below the post. Then I will think of a suitable solution to provide you with the template.

Finally, I would like to mention again: take the final result with a good portion of caution to you. There is no guarantee that my model describes reality even approximately correctly, as there are many subjective assessment by me. As a small consolation, there will soon be an article that will show you that in many cases the price of a share is not as important as you might think.

As always, I am open to questions, suggestions and criticism.

Stay tuned,

Your Michael Scott

#cashflow

#aktien

Sources:

[1] Wikipedia: https://de.wikipedia.org/wiki/Abzinsung_und_Aufzinsung

[2] Wikipedia: https://de.wikipedia.org/wiki/Discounted_Cash-Flow

[3] BWL-Lexikon: https://www.bwl-lexikon.de/wiki/free-cash-flow/#berechnung-direkte-methode

[4] Business lexicon: https://wirtschaftslexikon.gabler.de/definition/capex-52700

[5] SeekingAlpha: https://seekingalpha.com/

The simplest dividend strategy that always works

You buy / save four dividend-paying dividend ETFs such as:

- iShares EM Dividend, A1JNZ9, 8,0% dividend yield, four distributions / year, 0.65% TER, -3% 5-year performance

- iShares STOXX Europe Select Dividend 30, 263529, 6,4% Dividend yield, four distributions / year, 0.32% TER, +38% 5-year performance

- iShares Asia Pacific Dividend, A0J203, 5,8% Dividend yield, four distributions / year, 0.59% TER, +11% 5-year performance

- iShares UK Dividend: A0HGV6, 5,4% Dividend yield, four distributions / year, 0.40% TER, +19% 5-year performance

> You could just as well take other dividend ETFs with attractive payouts or more than four to increase the number of payouts.

>> When comparing the performance of dividend ETFs, you must of course add the annual distributions. add. Some dividend ETFs only pay out a pathetic 2% to 3% p.a. and then of course had more price performance. << Swipe

15 advantages of this strategy

1) 16 distributions per year is very motivating (especially for beginners). With five different ETFs of this type it would be 20 per year.

2) These distributions are reliable, because if a company/stock cuts or cancels its dividends, it is automatically dropped from the respective index. Other shares move up. Always top of the dividend league in your portfolio.

3) The ETFs mentioned can be invested in free of charge with almost all brokers and banks.

4) By diversifying the many shares in several ETFs, the risk associated with individual shares is avoided.

5) You save a lot of valuable time, as it can be a full-time job to follow all the news, analyses, quarterly reports, annual reports, ratings, etc. of e.g. 20-30 individual stocks. That's what an analyst does. But most people already have a full-time job. Many have a degree, training, family & children, hobbies, duties, do sport, want to travel or have to look after relatives. If you waste countless hours on shares in order to earn a few euros more a year, depending on your position, your hourly wage is often just a few cents. You might as well go to work regularly, including tax.

6) Dividend payouts are often increased so that dividend growth is recorded.

7) The dividends collected are not spent on consumption, but reinvested in the weakest ETF every six months. This gives you even more dividend growth.

8) If you get a pay rise, you also increase the savings plan installments again. This increases dividend growth again.

9) As a result of points 6-8, you will eventually receive a 13th salary from dividends alone.

10) If you stick with it for a few more years, you will then collect five-figure dividends. Then people will arrive and ask how you managed that. It's easy to work out when you'll personally reach that point.

11) Even if you have to cancel your savings plans at some point due to an emergency, you will continue to collect your 16 dividends every year for the rest of your life. And then you pass on these ETFs and your descendants will collect 16 times a year for the rest of their lives. So it's very sustainable.

12) In crises and crashes on the financial markets, you continue to collect your dividends while others mourn their price losses. This gives you peace of mind and prevents "shaky" hands / ill-considered panic selling out of fear.

13) The constant distributions allow you to comfortably utilize your annual allowance without any trading, selling or market timing. It is so simple. Also suitable for junior portfolios.

14) This strategy helps to create a passive income, which then increases the measly German pittance pension very well after decades. The alternative is a deposit bottle pension. No thanks.

15) After a few years, you will become familiar with the phenomenon of collecting double-digit personal dividend yields. More than 10% is quite realistic, as you had much lower purchase prices years ago and the dividends are constantly being increased. It was the same for me a few years ago. I had the aforementioned UK Dividend A0HGV6 and Euro Stoxx 30 Dividend Select 263529 and after only a few years I already received 11% personal annual dividend yield. No overnight money or fixed-term deposit can match that. Unfortunately, I then sold both ETFs to sink the money into Wirecard. Biggest mistake. Please don't be as stupid as me. Thank you.

Maybe a nice post to save with the bookmark at the bottom right

> Another tip: Please check the ETF data directly on the issuer's website. Broker/bank data is often out of date and therefore incorrect.

>> What other advantages does this strategy have? How do you like it? I have explained it to many beginners and they have been very happy with it for years and are making great money without stress and work.

>>> In the podcast "Buy High. Sell Low" episode 17 this ETF strategy is explained in detail with a calculation example. Link in profile description. Link: https://open.spotify.com/episode/0LzAFILz0zNiErh5lCJOvS?si=16oQ7uLXQ3WGGXdfeIvJnA

#etf
#etfs
#ishares
#blackrock
#dividende
#dividenden
#dividend
#sparplan
#juniordepot
#strategie
#traderepublic
#aktien
#aktie

The stock market guide for beginners

Lately, more and more people find their way to the stock market, which is accompanied by recurring questions. In this beginners guide I want to make it as easy as possible for newbies to get started and help build a basic understanding. I give reading tips & video suggestions and write short texts, hoping to make the early days easier for any prospective newbie. This post is a very rough orientation to get started. More in-depth information should be researched by everyone, adapted to their interests.

Disclaimer: I am just a guy on the internet writing down his opinion on how to get a good basic understanding of the stock market & investing. I am not an investment advisor, accordingly this is not investment advice or should be taken as a call for securities trading. Of course, I am caught up in my own subjectivity, so this article has a personal touch in addition to facts and information. That is precisely why it makes sense to listen to the opinions and assessments of other investors. Under point 6, I link to some posts from the past that are worth reading. However, new, value-added posts are published on Getquin almost daily.

Preface: Before the post starts, I'll give you a few important principles right at the beginning:

Think in the long terminvest only money, which you will not need in the next in the next 5-10 yearsinvest only in what you understand & do not pay Others to invest your money, when you can just do it yourself yourself.

Outline:

1. shares

1.1 What are shares and the stock market?

1.2 How to buy shares?

1.3 Why do you buy shares?

1.4 Taxes

1.5 Compound interest effect

2. etfs

2.1 What is an Etf?

2.2 An example

2.3 How do I find a suitable Etf?

2.4 What is the advantage of Etfs?

2.5 Savings plans

2.6 Risk minimization through long-term investment

3. bonds

4. cryptocurrencies

4.1 Crypto exchanges

5. should you book seminars?

6. further reading tips & video suggestions

1. shares

1.1 What are stocks and the stock market?

Shares are company shares in a stock corporation. The value of a stock, and therefore the entire company, is negotiated on the stock exchange through buying and selling. When you buy a share, you actually own part of the company. If the company increases in value, your share also increases in value. Exactly the same in the other direction when the value decreases.

Most shares you can buy also include voting rights. As a shareholder, you can be involved in decisions and vote. Realistically, however, it has to be said that most private investors hold such a small portion of companies that voting is completely lost next to the large investors such as investment houses and other companies or foundations.

Video suggestion: Shares simply explained https://www.youtube.com/watch?v=R2ZFgLROtTY

Video proposal: Stock market explained for beginners https://www.youtube.com/watch?v=TBRhvxEMu4U

1.2 How to buy shares?

Stocks are usually bought through a so-called broker. The broker is, so to speak, the intermediary between the private person and the stock exchange. The private person gives the broker the order to buy shares of a certain company at a certain price. Nowadays, there are brokers that you can operate as an app on your smartphone and buy and sell shares there conveniently and cheaply. Behind the broker is always a bank, which holds the shares for the shareholder. However, the share does not belong to the bank at any time, but exclusively to the shareholder, i.e. the person who bought the share.

At the moment, cheap and well rated brokers that you can use on your cell phone are the neo-brokers "Trade Republic" and "Scalable Capital". Neo-brokers, i.e. new types of brokers, are characterized by the fact that they cost little (e.g. 1€ per share purchase or sale, free savings plans) and are very uncomplicated, which makes stock trading, with all its opportunities and risks, easily accessible to everyone. Neo-Brokers are still relatively young companies with fewer employees than a house bank like the local savings bank. As a result, customer service is not as fast in case of problems and queries, but my personal experience is that the one time I needed Trade Republic's customer service, I was helped within a couple of days. If you're still looking for a neo-broker, you can ask someone who has already opened a securities account there if he or she will send you an invitation link, there's usually something free for both in return.

Of course, you can also open a share deposit account at a house bank. Usually, the customer service is better there, which is usually accompanied by higher fees. If you want to open a securities account at your house bank, it is best to contact your bank.

Reading tip: Trade Republic vs. Scalable Capital: https://app.getquin.com/activity/JODAHlHcum

@DonkeyInvestor

1.3 Why buy stocks?

There can be different reasons why people buy stocks. However, I would argue that the number one reason is a profit motive. There are two ways to make a profit on stocks:

1. Dividends: A corporation can distribute a part of the profit to its shareholders. For example, if you hold shares of company "Example" worth 100€ and the company distributes a dividend worth 2% per year, you will receive 2€ per year in dividends. Since the value of the company decreases by exactly this 2% in the short term when the dividend is paid out, in the long term there is another factor that is important in order to achieve profits with shares.

2. Price gains: If you have bought the shares of company "Example" for 100€, let's say 5 shares at the price of 20€ per share, you can of course sell them again. If the price rises from 20€ per share to 21€ per share, your investment is worth 105€ (5 x 21€ = 105€). You have recorded a book profit of 5%, which you could now realize by selling your position.

1.4 Taxes

Realized gains on shares are subject to capital gains tax in Germany. As of 2022, the capital gains tax is 26.375% - 27.995%. Depending on whether one is subject to church tax or not. As of January 1, 2023, every citizen in Germany is entitled to an exemption amount of 1000€ (married couples 2000€) per year in tax-free investment income. Previously, this amount was 801€ per year. This means that if you sell your shares of the company "Example" for 105€ and made 5€ profit, you don't have to pay tax on these 5€ as long as you haven't already used up your 1000€ tax-free amount. After this sale you would still have 995€ of the tax allowance open.

Since the capital gains tax is a withholding tax, it must be collected immediately. Therefore, with brokers that operate in Germany, such as Trade Republic, Scalable Capital or the Sparkasse, you will never receive the gross amount of your profit, but always the already taxed net. Therefore, it is advisable to specify in the settings of your broker under the aspect "Taxes" the tax-free amount that you want to use. If you have no other investment income for which you use the tax-free amount, e.g. a building society savings contract, you can specify the full tax-free amount with your broker. If necessary, you can also split the tax-free amount as you wish.

Every cent, which is realized above the annual tax-free amount, must be taxed. Therefore, it is advisable to save this tax event as long as possible, i.e. to postpone it, as this way more money works for you. Because the greatest friend of the long-term thinking investor is the compound interest effect.

1.5 Compound interest effect

Nothing and nobody in the world is as easy to satisfy and at the same time gives you back as much as the compound interest effect. Because you receive long-term profits on profits and not just on the paid-in capital, future profits increase, which means that subsequent profits increase even more and even average earners can become millionaires. This sounds abstract, but it is quite logical:

Let's assume you don't sell your shares of the company "Example" for 105€, but hold them. You have achieved a 5% return and are sitting on a profit of 5€. But because you now have 105€ working for you instead of 100€, the next 5% return will bring you 5.25€ instead of 5€, even though you did nothing at all for it. After this second 5% return now 110.25€ work for you and with the next 5% return you achieve 5.51€ profit. This game continues and the difference between profit by original capital and profit by compound interest becomes larger and larger. Now it brings little to invest 100€ once and hope for the compound interest. Actual return, which can be used for private retirement or general wealth accumulation, requires more capital and more compound interest, i.e. more time in which the money works.

Let's say you want to invest money for decades to come and take advantage of the compound interest effect. How can you know that the company "Example", in which your money is invested, won't go bankrupt or the share price will drastically decrease in value? The answer is simple - you can't know. I don't know, your hairdresser doesn't know, not even the CEO of "Example AG" knows. That's why it's important for long-term investments to be diversified. Diversification is what you call it when you don't just invest in one or a few companies, one industry, one region or one technology. To make sure that you don't have to sell your shares at some point because the company "Example" doesn't offer the profit prospects in 20 years as it might do now, you can diversify by investing in Etfs. Etfs are not the only way to diversify, but they are the easiest.

Video suggestion: compound interest explained simply https://www.youtube.com/watch?v=kyYguppNaqE

2. etfs

In order to take advantage of the compound interest effect, it is crucial not to have to sell or switch (from one stock to another). The sale of the shares would trigger a tax event. That you have to pay taxes on your profits is clear, but the compound interest effect can develop better if this taxation happens as late as possible. Preferably only when you want to get your hands on the money, i.e. in your retirement if necessary. One possibility that exists for this, a financial product that you can hold forever, can be Etfs.

2.1 What is an Etf?

An Etf is an investment fund, which is not actively managed. It is a bundle of different investment products, in the case of equity ETFs these are mainly equities. An Etf tracks an index. An index is a basket of securities that contain a market, a region or a certain segment. The Etf is the possibility to invest in such an index.

Etfs cost an annual fee called the "TER." The TER indicates the percentage you pay annually for the Etf. Etfs are very cheap compared to actively managed funds or fund-linked annuities, because they tie up much less staff. The TER, for example of 0.2% per year, is deducted daily from your Etf position in the portfolio, so you don't even notice it. The following example is lame because the value of the etf would not stay the same for a year, but for simplicity's sake, let's pretend: for a 20,000€ position on an etf with 0.2% TER, you would pay 40€ in fees a year. That's a little less than 11 cents a day.

Video proposal: Etf simply explained https://www.youtube.com/watch?v=YVB2TV0ziIE

2.2 An example

There is an index that tracks the industrialized countries. It is called MSCI World. "MSCI" is the issuer that created this index. "World" is the name for the industrialized countries. This index contains about 1,500 stocks, many of them you know for sure. Apple, Microsoft, Tesla and many other stocks are ranked in this index by market capitalization, that is, by size (in terms of the value of the company). There are Etfs on this index.

For example, the "iShares Core MSCI World UCITS ETF USD (Acc)." Such names can be a bit intimidating, but always have useful designations by which you can get information about the Etf.

This Etf is from "iShares", a product group of the world's largest asset manager Blackrock. "Core" stands for the product range in which this Etf falls. "MSCI World" stands for the index that the Etf tracks. "UCITS ETF" means that it complies with the EU guidelines for Etfs. "USD" means that the fund currency is the US dollar. "(Acc)" indicates the type of dividend distribution. There are Acc (Accumulating=thesaurating) and Dist (Distributing=distributing). Acc Etfs immediately reinvest the dividend back into the Etf, so the value of the Etf increases. "Dist" Etfs distribute the dividend to the owner.

Video suggestion: What is the MSCI World Index?: https://www.youtube.com/watch?v=H7atGYGGAdM

2.3 How to find a suitable Etf?

Basically, you find a suitable Etf by being clear about what you want to invest in. Do you want to invest broadly diversified in the world economy or do you want to take a sector bet on a specific region or industry? Personally, I choose to invest broadly diversified in the global economy as simply as possible. My goal is to provide for retirement with a healthy risk-reward ratio. Many roads lead to Rome and so there are different investment strategies to achieve this goal. I have chosen this way.

To cover the global economy, I need an Etf that includes the industrialized countries and the so-called "emerging markets". This can be done by either blending two etfs together myself or choosing an all world etf. I watched videos about different Etf portfolios on Youtube and compared suitable Etfs on the website "JustETF" and decided for the "MSCI ACWI" (MSCI All Countries World Index Etf) from iShares. This is composed of about 89% industrialized countries and 11% emerging markets.

Here you can look up information about individual Etfs: https://www.justetf.com/de

So ask yourself what your goal is. I would argue that it makes sense for a great many people to invest money monthly in the broad global economy in order to benefit from economic growth over the long term, however, you can also use Etfs to focus on specific regions, industries or technologies if you so choose. Basically, one does not exclude the other. If you have formed a stable core through Etfs, you can of course still invest in individual stocks or sector Etfs. This strategy is called "core-satellite". Others do without Etfs and invest exclusively in companies that they have selected personally.

There are criteria that are valid among many etf investors, which I would like to share with you: It is said that an etf, as long as it does not track very specific markets, should not cost more than 0.2% TER and have a fund volume of at least 100 million US dollars. Of course, it is best if it has been around for a few years and you can compare it to a benchmark index or other etfs. Investing in Etfs is also called passive investing.

2.4 What is the advantage of Etfs?

As already mentioned, an Etf always tracks an index. This index consists of the largest stock companies of the market to which the index is limited. So an All World Etf includes the largest file companies in the world. One invests, if one invests in an All World Etf, in the largest of the largest. In the case of the ACWI Etf, which I invest in monthly, as of November 2, 2022, there are 1,645 different stock companies in which I invest through the Etf.

The advantage is that if, for example, the company Apple, which is the largest position in the ACWI Etf, would go bankrupt or lose significantly in value, it would sooner or later fly out of the Etf, because it is no longer represented in the index. My money is shifted within the Etf from Apple to other companies. Completely automatically and without tax events. People who bought Apple shares directly, not through an Etf, will have to sell their shares, probably even at a loss. If they can still save profits, these would have to be taxed and the compound interest effect is slowed down.

A less dramatic example is that if Apple ever loses value for some reason, the performance of the other stocks in the Etf can make up for that loss, while someone invested in a few stocks will always have to rely on the performance of those few companies. Whether individual companies will still exist in decades is uncertain, but the global economy should still exist. And if not, we have other problems than our stock portfolio.

2.5 Savings plans

It is fair to say that a ready diversified Etf is one of the easiest and least risky solutions to invest your money in the capital market. For many people it makes sense to create a savings plan, because not everyone has a lot of capital to invest in one go, but can only invest a part of their salary every month. These savings plans can be automated, so that by standing order a fixed amount is transferred to the settlement account of the broker and every month (for example, always on the 2nd or 16th of the month) shares in the Etf or stock of his choice are automatically purchased in the amount of the fixed amount.

It helps to keep track of your finances and how much money you spend each month. There are apps for this purpose, such as "Haushaltsbuch: Money Manager". If you know how much you spend each month, you can set yourself a savings rate, a fixed amount that you invest each month. If you have irregular income, this step is more difficult, in which case I would postpone investing until you know for sure how much of your current monthly salary you still need and what you can invest.

Investing regularly provides a "cost-averaging effect." By buying regularly over a long period of time, at both high and low prices, you build up an average purchase price, also called the "Buy In". If you only look at the buy in, the price fluctuations become smaller and smaller. This can be seen as an allegory for the positive effect of the long term. One of the most famous stock market quotes is "Time in the market beats market timing", i.e. the time you spend in the market, provided you buy in regularly, beats any attempt to hit the "perfect" moment with a few targeted investments.

Video suggestion: Step by step to the Etf savings plan https://www.youtube.com/watch?v=LCLpqN99_iU&t=35s

2.6 Risk minimization through long-term investment

Return comes from risk. You would not be able to make money on the stock market if you were not exposed to risk. The risk you are exposed to when you invest in stocks or Etfs is the possible loss of value. One is exposed to price fluctuations. The price fluctuations that provide returns can also provide losses. Why should you expose yourself to this risk?

In my rationale, I assume that we are talking about long-term investments in a broadly diversified portfolio, preferably through one or more Etfs.

The global economy is growing steadily. Crises and disasters always inflict damage on stock prices, but over the long term, the expected value of performance is positive. So we assume that the value of the etf we invest in will increase over the next years and decades, because it contains the world economy. From this point of view, price drops like the outbreak of the Covid-19 pandemic are very good opportunities to buy cheaply valued shares. However, we also have to watch our already invested capital dwindle.

Let's say we started investing in the MSCI ACWI ETF in November 2019. We would have seen a nice 8% return in February, but a 25% drop just one month later. We would have had to brave this downturn and the emotions that came with it. Not gotten cold feet and not sold. In such moments, it is especially important to understand your investment. The market can be very turbulent and irrational and if you are not informed and do not have a strategy, you are vulnerable to selling your investments and realizing losses at such times. Regularly saving a diversified etf to build wealth is already a strategy that has worked for many people. Keep it simple, you don't need a master plan à la Jogi Löw to build wealth.

Share prices recovered dramatically after the Covid-19 crash. Those who held their shares were rewarded for their risk. Those who simply let their savings plan run in the crash were rewarded even more. The stock market is for private investors, a risky place. But unlike in the casino, which is why the comparison stock exchange and casino is also inadequate, the chances for the private investor become better and better with longer maturity. Anyone who wants to invest money responsibly should consider not only global diversification but also the long-term nature of the investment, which is needed to reduce risk and increase the chances of return. At this point, compound interest beckons, which is also happy about long-term investments.

3. bonds

Bonds are a way for governments or companies to borrow money. Thus, bonds are loans that are traded on the stock market. A government or company can issue a bond with the promise to pay back the money in the bond at a set interest rate over a period of time. This allows companies to get money without having to sell shares in the company. On the stock exchange, private investors can buy these bonds. Bonds issued by governments and companies with good credit ratings are considered to be lower-risk than stocks, and accordingly the expected return is lower. When interest rates rise, bonds become more desirable, because the interest rate of the "relatively safe" interest, rises. There are also Etfs that bundle bonds of governments and/or companies.

Video suggestion: bonds simply explained: https://www.youtube.com/watch?v=c8PXAs0IoU4

4. cryptocurrencies

Cryptocurrencies are considered very risky and are subject to high volatility, i.e. high price fluctuations. The largest cryptocurrency called Bitcoin is a decentralized network, which, like other cryptocurrencies, is based on blockchain technology. Bitcoin relies heavily on network effects due to its decentralized nature. Decentralization means that no individual, state, or company can have control over the Bitcoin network. The blockchain runs across thousands of nodes operated by private as well as institutional users worldwide. The more people maintain the Bitcoin network, the more stable and secure it becomes. There are many different opinions on the subject of Bitcoin. It is best to form your own opinion and then decide to what extent Bitcoin or other cryptocurrencies should play a role in your portfolio.

Reading tip: Cryptocurrencies for beginners part 1: https://app.getquin.com/activity/buTJFYxcSD

@DonkeyInvestor

4.1 Crypto exchanges

The crypto world is not yet as regulated as the stock market, which means that there are always rip-offs and scams. A licensed and regulated crypto exchange is the "BISON App", which cooperates with the Stuttgart Stock Exchange. For beginners, a simple and reputable way to invest in exclusively established cryptocurrencies, by the way, also via a savings plan, although there are other providers that are no less good.

Reading tip: crypto exchange comparison: https://app.getquin.com/activity/PfAxjKLYpc

@Europoor

5. should you book seminars?

At this point, I simply state that there is an incredible amount of information, completely free of charge on the Internet. Youtube is a better teacher than many schools in the 21st century and adds a lot of value. There are good books about money, economics and investments. But as soon as someone promises to tell you secrets that no one else knows, you better get suspicious, because the stock market has existed for centuries. The "secrets" of how to be successful in the stock market are well known. Someone who has to convulsively create a sense of panic or fear of missing out (called FOMO) in order to sell seminars cannot, in my opinion, show you how to get rich. After all, he doesn't seem to be rich enough himself to simply live off his stock market secrets and tricks.

6. further reading tips & video suggestions

On Getquin there are some posts, from people who have a clue and really put effort into creating their posts. If the topics interest you, you can read through the posts or bookmark them to watch later.

Statistical manipulation and emotional trading:
https://app.getquin.com/activity/GDlzIDdeHe

@leveragegrinding

How to value stocks:
https://app.getquin.com/activity/laOUVhfFDI

@TheAccountant89

Investment strategies from a dividend investor's perspective:
https://app.getquin.com/activity/BzmjNGXgex

@BASS-T

Partial exemption for etfs and equity funds: https://app.getquin.com/activity/CtjdOjCclh

@Lorena

Physical gold and paper gold:
https://app.getquin.com/activity/ApWcaXFtjm

@InvestmentPapa

9 years of stock market experience: https://app.getquin.com/activity/cYKFAoIizD

@Mister_ultra

How to find a (new) job:: https://app.getquin.com/activity/XwCqxSnoLb

@Barsten

The Derivatives Guide:
https://app.getquin.com/activity/rRSPMsiSXp

@leveragegrinding

The Marketing 1x1 for Getquin: https://app.getquin.com/activity/onpCOHgXPm

@Lorena

Bitcoin and Energy Consumption: https://app.getquin.com/activity/LKwJTNGvOZ

@oliverplass

Estate Planning and Providing for a Situation Where You Couldn't Make Your Own Decisions: https://app.getquin.com/activity/kaGUVfDlsJ

@tim1

Investing for Your Kids: https://app.getquin.com/activity/sIqAFiFsiF

@freakyfinance

Tax Changes in 2022: https://app.getquin.com/activity/NzwvRzCssw

@DerSteuerberater

Risks, rewards & morality of P2P lending:
https://app.getquin.com/activity/uxmZCFjVXq

@InvestmentPapa

Book Review "The Only Book You Should Read About Finance." https://app.getquin.com/activity/cbGjEJiKHY (by me)

There is a lot of serious and value added content on Youtube. The only important thing is to separate the wheat from the chaff. Exciting titles and promises should discourage rather than inspire confidence.

12 tips for beginners https://www.youtube.com/watch?v=pGIBJHQJcR8

Short repetition around the topic stock exchange & shares https://www.youtube.com/watch?v=h0lJ2goopnI&t=15s

Basics of retirement planning 1/5: https://www.youtube.com/watch?v=40fH_50aShk

Basics of retirement planning 2/5: https://www.youtube.com/watch?v=qiuoOgKHmmg

Basics of retirement planning 3/5: https://www.youtube.com/watch?v=jcLOAzwF_Ns

Basics of retirement planning 4/5: https://www.youtube.com/watch?v=y5L-XlF-aSc

Basics of retirement planning 5/5: https://www.youtube.com/watch?v=f7GMgxC3qWo

How would I invest 50€, 150€, 300€ monthly: https://www.youtube.com/watch?v=RSo_LfsLLVI

Daily news (working days of Wallstreet) about Wallstreet and macroeconomic events: https://www.youtube.com/user/kochntv

#stocks
#aktien
#guide

My "Dividend every month" share savings plan. In February it was now 72 months ... 6 years 🤩😳

The portfolio stands at around €46,800. The total return (share price + dividend) is almost 39%. With the savings plan, the average annual return over the last 6 years is therefore currently around 11.1% - not bad at all for a savings plan 😅

$MSFT
$AAPL
#dividende
#aktien
#sparplan
#depotupdate

Why I am invested in Amazon (WKN: 906866) - and why (maybe) soon no more.

My big Amazon analysis (Not investment advice):

Foreword:

I've been on getquin for 2 months now and logged in for about 1 month. Since then I have been able to read great and informative posts that have broadened my horizons and inspired me to both discussion and reflection. Now, of course, after only a month of "membership"(There really is now) I can not judge whether the lurid and logic-free content has increased, however, I had my silent readership from 2 months ago not yet the feeling to hang out partly in some subreddit. That has changed a lot, especially in the last 2-3 weeks.

But in order not only to prove a big mouth among the ultimately mentioned posts, I would like to introduce you to the company Amazon once (to the best of my knowledge) and thus offer a Mehrwehrt for all who are interested in the company and the share.

In addition, I was told on Instagram, I can only come this way to the awesome merch 🙈

Amazon should be in the depot especially with many stock market novices, among which I would also count myself by the way. The stock seems somehow Security whether this is a fallacy, however, we will hopefully find out in a moment.

My personal background with Amazon:(If you're bored by this, just skip it).

I have worked for the company both as a site security supervisor in a delivery station, as well as Site Manager of a fullfillment center.

I am familiar with internal processes, the real work-life balance, the corporate mission statement and much more. You could say I see myself as someone who knows what it looks like behind the glittering curtain.

I have seen sites come into being from the first stone to the last, experienced the training of future personnel and, in some cases, trained and instructed service providers from within my own ranks.

I didn't stand around stupidly at events, looking dangerously out from under a dark hood like stewards are doing right now at -1 degrees at the local Christmas markets - logo there I would also be in a bad mood.

Even back when I started as a security service provider at Amazon, everything was innovative, modern and totally "futuristic" (today I think differently).

90% of my work took place on the latest computer with great systems and new software.

• fully automated people singling systems
• RFID chips with access authorizations
• From the cleaning staff to the station manager, I was on first-name terms.
• Managers strolled past me with their mobile workstations as if on a Sunday stroll.
• Chai latte drinking youngsters who had just finished their high school graduation, did their work and poked around with the fork in the delivered Chinese food, while 1 floor below the guest workers with their still 6-month valid non-EU driver's licenses freshened up for the end customers.

"This must be paradise...so not for all...but some just" I thought.

I was then asked after a short time whether I could imagine greater, because my good performance quickly found approval.

A little later I found myself in a Fullfillmentcenter(FC).

FC roughly broken down:

• a 120,000m² area with goods that go into the three-digit million range.
• Parking lots as big as soccer fields
• Hundreds to thousands(Q4) of employees
• No more chai latte and chill 😅

Why I quit my job at Amazon after Covid-19 I might tell in a separate post(If there is interest).

Amazon unintentionally taught me a lot and changed a lot in my life -. note my profile picture 😉

Now let's go!

What is Amazon?

Amazon is a globally active online mail order company with a wide range of products. According to its own information, Amazon, as the market leader of trade on the Internet, has the world's largest selection of books, CDs and videos. Via the integrated sales platform Marketplace, private individuals or other companies can also offer new and used products as part of online trading. The Amazon Kindle reading device for electronic books, the Amazon Fire HD tablet computer, the Fire TV set-top box, the Fire TV Stick HDMI stick and the Echo voice recognition system are sold under the company's own brand. Through Amazon Web Services, the company is also one of the leading service providers for cloud computing.

1.1 Amazon Facts

• Amazon has a Market capitalization of 984.87 billion USD
• Over meanwhile 850 logistics locations worldwide
• at which over 1.5 million employees are employed
• Amazon is the second largest employer in the USA
• Since 2021
  is no longer Jeff Bezos but Andy Jassy is the CEO

1.2 Who actually holds the company's shares?

75% of the shares are in free float.

Freely tradable shares of a company that are owned by many shareholders.

12.7% of the shares are held by Jeff Bezos

CEO of Amazon until 2021.

6.6% of the shares are held by The Vanguard Group

The Vanguard Group is a U.S. financial services provider

5.7% of the shares are held by Blackrock

BlackRock Inc. is an internationally active U.S. investment company.

1.3 How does Amazon earn its money?

• 1.3.1 eCommerce

Amazon's core business is eCommerce.

Amazon dominates the US market here, which is clearly one of the most important sales markets.

• With 49%, Amazon is the absolute leader here.
• Ebay, Walmart, Homedepot, Bestbuy, Costco and others share the rest.

BUT:

AThat market capitalization is not everything becomes clear if we take the Chinese eCommerce giant as a comparison.

That the US market is not everything becomes clear if we take the Chinese eCommerce giant as a comparison.

With a market capitalization of USD 229.70 billion, Alibaba is far behind Amazon with its USD 984.87 billion.

However, Alibaba dominates the entire Asian market, Alibaba's revenue has been steadily increasing and reached a value of around 853 billion yuan (equivalent to around 134.6 billion U.S. dollars). Compared to the previous year revenue increased by about 19 percent.

Compared to the prior-year quarter, Amazon's sales increased by around 15 percent from around 110.8 billion US dollars to 127.1 billion US dollars
increased. The company generated its highest quarterly revenue to date in the fourth quarter of 2021.

Descending best-selling items from Amazon:

• Electronics
• Clothing, shoes and accessories(I had to google that word 😅)
• Household and kitchen appliances
• Cosmetics and hygiene products
• Books
• Telephones/Smartphones
• TV sets and accessories
• Movies and content via Prime streaming
• Pet supplies

• 1.3.2 Amazon Prime Members

Amazon Prime is an optional paid subscription offered by Amazon that allows Amazon customers to access additional services that are not available to regular customers or are subject to a fee.

These include, for example, special shipping services or the video streaming service.

As of 2021 Q1 Amazon had 200 million paying Prime customers, unfortunately I can't find any currently confirmed numbers but due to the price increase the giant might have lost some customers.

Amazon had announced in July 2022 to increase the price of Amazon Prime in Germany by about 30 percent, whereupon I also terminated my subscription.

• 1.3.3 AWS (Amazon Web Services)

Cloud computing, what is it?

In principle there are 4 core areas in AWS which in turn offer much more content.

One can divide the following areas, which customers can buy:

• Provide storage space (pictures, videos, files or complete web presences)
• computing power
  to provide (To run a web presence or web-based service)
• Provide databases (To store information/data permanently or temporarily, both for offerings on the web and backups)
• Provide management tools (To track, manage and collaborate with others on all services, building blocks and projects)

Opening these areas now is beyond the scope, but you surely understand the possible applications behind them.

AWS has already supported some well-known companies that you may also have in your depot.

Netflix on AWS

Netflix is the world's leading Internet television network with more than 200 million members in more than 190 countries enjoying 125 million hours of television shows and movies every day. Netflix uses AWS for nearly all of its compute and storage needs, including databases, analytics, recommendation engines, video encoding, and more than a hundred functions that collectively use more than 100,000 server instances on AWS.

Coca Cola
with AWS

As the COVID-19 pandemic continues to change the world and consumer behavior shifts, The Coca-Cola Company has developed a new pouring option to meet consumer needs via smartphone with its latest technology innovation, Coca Cola Freestyle - contactless mobile pouring. This is based on Coca-Cola's existing serverless architecture Amazon Web Services (AWS)

Volkswagen and AWS develop Industrial Cloud

Volkswagen and Amazon Web Services will jointly build the Volkswagen Industrial Cloud. The two companies announced a multi-year development collaboration for this purpose. In the future, the Volkswagen Industrial Cloud will bring together the data of all machines, plants and systems from all 122 factories of the Volkswagen Group.

Here are a few figures:

• In the year 2020, just under 45 billion U.S. dollars in sales.
• In the year 2021 around 62 billion US dollars Sales
• In the third quarter of 2022, sales of around $20.5 billion. Sales.

This makes Amazon the leader in the cloud computing market, and I'm eager to see the final 2022 report.

2.1 What other Amazon brands do I find interesting?

Twitch:

Twitch, also known as Twitch.tv, is a live streaming video portal used primarily for broadcasting video games and interacting with viewers via chat.

Twitch is the largest and most successful player in live streaming here.

• 69% of the total hours that users watched live content on all platforms were watched on Twitch from 2021 Q1 to 2022 Q2.
• Most of the money is made here with advertising revenue generated.

Zoox: what Tesla can do, Amazon can do maybe also 🤷🏻

Zoox, Inc. is a subsidiary of Amazon that is developing autonomous vehicles to provide mobility-as-a-service.

• Amazon bought the company for $1.3 billion in June 2020
• Both robotaxi and autonomous delivery are expected to become possible
• The Zoox vehicle has already been driven without occupants, chasers or emergency brakes on open but private roads including road users such as pedestrians, cars, cyclists and trucks.
• The tests will now be extended to public roads.

Where is the journey headed?

After several years of testing, the robotaxi sector has begun to transition to commercialization in 2021 with an exponentially growing fleet of cars. This is thanks to rapidly falling hardware costs, better algorithms, better infrastructure, and loosening regulations.

Self-driving cars and trucks will sometime in the future be a normal part of the daily street scene. You can already see it in some parts of the world.

Zoox definitely has potential.

2.2 Business units at a glance

• onlinestores = 42 %
• third-party seller = 23 %
• AWS = 16 %
• advertising = 8
• subscriptions = 7
• offlinestores = 4 %

In the long term, I think that due to the high demand of AWS and the resulting profits, the focus of the business area will shift once again. AWS should grow significantly in the next 5 years and replace onlinestores at the top.

3.1 The interesting figures

Division | 2020 | 2021 | Performance

Sales | $ 368.1 billion | $ 469.8 billion | +21.7 %

EBIT | $51.5 billion | $66.3 billion | +8.7 %

Net income | $ 21.3 billion | $ 24.9 billion | + 56.8 %

Equity| $ 93.4 billion | $ 138.2 billion | + 48 %

Return on equity | 55,1 % | 48 % | - 7,1 %P

3.2 Other fundamental key figures
2021

Valuation ratios are notoriously debatable, but here are a few at a glance.

Earnings per share in EUR |3.13 -&gt; Definitely in the red in 2022

P/E RATIO |51.45 -&gt; Forecast 2022 lower

Earnings growth (%) |+54.94 -&gt; Forecast 2022 lower

PEG |-0.50 -&gt; Forecast 2022 higher

Cash flow per share in EUR | 88.32 -&gt; Forecast 2022 lower

Sales in USD | 469.82 billion -&gt; Forecast 2022 lower

Sales growth (%) | +21.70 % -&gt; Forecast 2022 lower

Based on the figures, it can be said that the development is currently somewhat difficult to assess. 2022 is definitely not a good financial year for Amazon.

3.3 What does Amazon spend money on?

Research &amp; development

Amazon has spent over in one year more than 60 billion USD on research &amp; development. No other company has invested so much money in research &amp; development.

People cause costs

In the area of HR (Human Resources), the giant incurs significant costs of over 8 billion USD. With 1.5 million employees worldwide, there is an immense level of fluctuation.

Amazon Alexa is not profitable

The device division of the sprawling corporation responsible for Alexa alone causes an operating loss of more than $5 billion every year.

4.1 Moat

Yes the giant recently got into a tailspin and we were all amazed that we had to record over -20%.

The earnings call in October disappointed many investors, although I think that was to be expected.

The share price is 50% below the all-time high, which hasn't happened for Amazon in ~15 years. Where one exits, opportunities arise for others.

Here is why:

• Amazon has existing customers through Prime membership, making it much easier to launch services like Amazon Prime Video and Amazon Music.
• If Amazon enters the healthcare industry, it already has a large logistics and retail network.
• If Amazon enters the gaming market, it already has customer access through the gaming streaming platform Twitch.

That's a huge - indeed, perhaps unfair - advantage, a so-called moat. Amazon needs to leverage that power (and, more importantly, AWS). We'll see if Amazon goes about it the right way.

4.2 Conclusion and why I will leave the company

All this doesn't read too bad at first - and it's not.

However, we do not invest only because of the great ACTUAL state but expect a great WEALTH state and thus also a fine return.

Which speaks for a purchase:

• Amazon is currently cheaper than it has been for a long time (this does not mean that Amazon is fundamentally cheap)
• Amazon has its fingers in many growth markets
• AWS

What speaks against a purchase:

• Amazon invests a lot of money in research &amp; development, which is basically good but reduces margins and burns money
• Other companies are catching up significantly in the cloud business
• The company is constantly criticized, which weakens growth.

Amazon is currently cheaper but still no pre-Christmas bargain.

I still took advantage of the recent drop in the share price, bought in to stay invested for the long term and will now hold my shares. I find AWS and the cloud very exciting. I still believe that Amazon can and will continue to grow, but I am slowly becoming more skeptical.

I will hold my shares for a while, but I am squinting at other big tech companies that are also busy in the cloud. If Amazon ever decouples AWS for reasons I don't know and which are currently illogical and launches it on the market as its own stock, I would immediately sell my Amazon shares and reallocate them.

I hope you enjoyed my first analysis and can consider it an added value to the community.

Again - not investment advice. Bye 🙂

References:

1.1 Sources:

https://www.aboutamazon.de/news/ueber-amazon/was-ist-amazon

1.2 Sources:

https://stock3.com/aktien/amazoncom-119109

1.3 Sources:

https://de.statista.com/statistik/daten/studie/197099/umfrage/nettoumsatz-von-amazoncom-quartalszahlen/

1.3.3 Sources:

https://aws.amazon.com/de/solutions/case-studies/coca-cola-freestyle/

https://aws.amazon.com/de/solutions/case-studies/netflix/#:~:text=Netflix%20auf%20AWS&text=Netflix%20verwendet%20AWS%20f%C3%BCr%20fast,Server%2DInstances%20auf%20AWS%20verwenden.

https://de.statista.com/statistik/daten/studie/447932/umfrage/umsatz-von-amazon-web-services-weltweit/

2.1 Sources:

https://streamhatchet.com/reports/

https://www.wiwo.de/unternehmen/dienstleister/zoox-so-sieht-amazons-robotaxi-aus/26719244.html

3.1 Sources:

Annual Reports Year 2020 &amp; 2021

3.2 Sources:

https://www.onvista.de/aktien/kennzahlen/Amazon-Aktie-US0231351067?referrer=https%3A%2F%2Fwww.google

3.3 Sources:

Annual reports year 2020 &amp; 2021

https://de.statista.com/statistik/daten/studie/1186900/umfrage/ausgaben-gafam-fuer-forschung-und-entwicklung/

https://www.wsj.com/articles/amazon-has-launched-a-cost-cutting-review-focused-on-unprofitable-business-units-11668094823

#analyse
#aktien
#amazon

🚨 Which topic do you want to read next? Every vote helps to find a topic. In the future I would like to be a bit more active here again! :)

PLEASE VOTE FOR THE NEXT 2️⃣ TOPICS. Result will come the days

🍷 - Investing in German wine: not to cry? An analysis of a renowned wine merchant

🎰 - The problem with Vici Properties

🥤- Coca Cola disappoints with the share price. My assessment of the dividend king

📸 - My journey as a niche youtuber & what the pros and cons of Getquin, Instagram & Youtube are for channels below the 5,000 subscriber mark.

❗ - Haters are my most loyal fans. A different perspective on hate on the net against me Bass-T.

🏬 - Complex investing in hotels to maximize profits. A topic that hardly anyone talks about. Rightly so?

❌ - Why "No investment advice"?

Thank you all

Your BASS-T

No investment advice

#aktien
#dividende
#feedback

💨 Share presentation 💨

Northland Power Inc.
$NPI

CA6665111002

Or also."Gone with the wind" 💨🥸

Company Description:

Northland Power Inc. is a Canadian electric utility headquartered in Toronto. Northland operates power plants in Europe and Canada, with a focus on natural gas and renewable energy. [1]

Business Units [4]:

Offshore Wind

Onshore Renewables

Utilities

Natural Gas

New Technologies

Sales (in thousands CAD) [7]:

Offshore Wind (DE / NED): 1,259,247

Onshore Renewable Facilities (CA / ESP): 485,857

Natural Gas (CA): 425,572

Utilities (COL): 269,692

Other: 8,447

More than 70% of revenues are generated by Offshore/Onshore Wind, or the operation of wind turbines on water, and Onshore Renewables, which includes solar installations and wind power generation on land.

The attached chart shows the existing onshore and offshore wind farms and solar plants.

In the future, the company would also like to invest in South Korea, Japan, Scotland and Taiwan and finance offshore wind and solar projects. Some of these are already in the early/mid-stage.

About us according to homepage:

"Northland Power is a power producer dedicated to developing, building, owning and operating clean and green global power infrastructure assets in Asia, Europe, Latin America and North America. Our facilities produce electricity from clean-burning natural gas and renewable resources such as wind, and solar. We have a long track record of 35 years in business." [2]

Strategy according to company homepage:

"Northland aims to continually increase shareholder value by creating high-quality projects underpinned by revenue contracts that deliver predictable cash flows. We strive for excellence in managing our projects and operating facilities, always seeking opportunities to enhance performance and value. We focus on sustainability with the goal of improving the impact of resource usage in our environment." [3]

"We actively seek to invest in technologies and jurisdictions where we can apply an early mover advantage and establish a meaningful presence. We inspire our people to achieve excellence in everything, embracing and living Northland's values on a daily basis." [3]

We will certainly find out in this analysis whether Northland also puts its strategy into action. So what do we want to see from the facts and figures?

A. Secure and predictable cash flows.

B. Shareholder value.

C. Good/meaningful strategic alignment.

D. Sustainability in the projects.

Key figures Northland Power [6]*:

-KGV 2022: 10.7

-KGV 2023e: 24.6

-KGV 2024e: 18.6

-KGV 2025e: 25.4

-PEG 2023e (P/E/growth rate*): = 6.15 (rule of thumb: < 1 = very favorable)

-PEG 2024e: = 4.65

-Price to book 2023e: 2.25

-Price to book 2024e: 2.13

-FCF margin 2023e: 15.6%

-FCF margin 2024e: 16.1%

-Enterprise value to FCF 2023e: 34.5

-Sales growth: 2023e: -10.2%; 2024e: 4.7%; 2025e: -1.4%

-EBIT growth: 2023e: -20.6%; 2024e: 4.3%; 2025e: -1.7%

-Dividend yield 2022: 4.97% (payout ratio of the last 3 years at 83%)

Country key figures for Australia, NZ and Canada [9]:

-Total P/E ratio (excluding banking sector/financials): 11.64

-growth (excluding banking sector/financials): 11.99

-KGV Power (power generation): 18.72

-PEG Power (power generation): 1.18 (growth next 5 years 9.6%)

-Inflation Canada (forecast for 2023): 3.9% [10]

-Lead interest rate: 5% [11]

-Government debt: 66.4% of GDP [12]

-->Growth rate Northland*:

Based on Northland Power's general and sector-specific data and revenue, or EBIT forecasts, I assume average growth of 4% p.a.. Northland is growing slower than the market! 4% is even too high from a short-term perspective.

Side Note: Based on valuation metrics, we could have an attractively valued market (Australia, NZ and Canada)!

Based on the growth prospects, I don't see Northland as cheaply valued. I would rather put it in the "moderately valued" range.

Traderfox Scores [16]:

Quality Check: 13 out of 15 points

Dividend Check: 9 out of 15 points

Growth Check: 5 of 15 points

Rubric - What would Buffet say (Data from Annual Report 2022 [7]):

Criteria to be read in detail:

https://app.getquin.com/activity/XcuRrJwmyP

Income Statement:

-Net Margin: 2022: 39%, 2021: 12.89%*, 2020: 23.54% -->positive! (Buffet's target: >20%)

*In 2021, operating costs and depreciation quite high relative to comparable periods.

-Gross margin: 2022: 88.9%, --> positive! (Buffet's target: min. 40%)

-Sales/administration. and other overheads: 3.4% of sales --> positive! (Buffet's target: max. 30-40%)

-Interest expense: 30.78% of operating profit -->negative! (Buffet's target: <15%) Per HJA 2023 leicht rückläufig.

Key Note Income Statement: Gute Margen und geringe operative Kosten. Zinsaufwand etwas zu hoch!

Balance Sheet:

-Eigene Aktien (Treasury Shares): Nein! -->negative (no shareholder value through buybacks)!

--Debt < 4xEBIT: Ja! →positiv!

-Verhältnis kurzfr. Fremdkapital zu kurzfr. Vermögen: 0,81 -->positive! Ideally <1 -->The cash position alone covers 68%. One could pay therefore immediately 68% of the short term liabilities!

-EK ratio: 33.2% (2022)->all right. Target should be at least 40%.

-EK yield: 18.84% →positive (>15%)!

-Goodwill: 5% of total assets and 15% of equity -->reassuring and thus no reason to worry! For more details on goodwill:

https://app.getquin.com/activity/ymidZwhlTk

Key Note Balance Sheet: Solid debt situation with sufficient cash and therefore flexibility.

Cash flow statement:

2021 (previous year) in parentheses, figures in CAD (in thousands):

-Operating cash flow 1,832,983 (1,609,295)

-Cash flow from investing activities -629,683 (-1,030,863)

=Free cash flow 1,203,300 (578,432)

-Cash flow from financing activities -604,837 (-225,679) -->Main components are debt repayments and dividends paid.

Capital expenditures: 76% of net income (Buffet's target: <50%) -->negative! However, understandable due to the investment-intensive business. I therefore do not see this quite so critically.

Company classification according to Peter Lynch [12]:

-->Slow Grower (2-3%) or Stalwart (5%, max. 12%).

Peer Group/Competition [5]:

Here I took the liberty to use the Traderfox Peer Group Check. Attached is a picture with a few relevant comparative figures of selected companies. Northland does quite well (good net margin, fair P/E ratio):

Crescent Point Energy Corp (CA) P/E 4.37 -->but focus on oil+gas.

Iberdrola (ESP): P/E 16.52

Orsted (DK): P/E ratio 11.49

Energiekontor (DE): P/E 16.52 -->Whereby Energiekontor does not exclusively operate wind farms itself but resells them to generators and is therefore a potential business partner of Northland.

Siemens Gamesa (ESP): P/E ratio negative!

RWE (DE): KGV 9.32

EnBW (DE): P/E ratio 13.11

My own analyses on Iberdrola and Energiekontor can be found here:

https://app.getquin.com/activity/vXGiuLuFAK

https://app.getquin.com/activity/vrtMBgZQJu

Competitive Advantage/Burggraben:

-Over 30 years of experience in renewable energy. +

-Focus on business partners with good credit ratings. +

-Good margins, especially for an investment-intensive company. ++

Risks/weaknesses:

-Impairment risk.

Similar to Orsted, there is a short-term risk of impairment. See the following article:

https://www.iwr.de/news/rsted-kuendigt-milliardenschwere-wertminderungen-fuer-us-wind-portfolio-an-aktie-bricht-ein-news38420

Due to the low goodwill, however, I am reasonably reassured, even though wind farms are of course accounted for as the main item in fixed assets. There is still a risk here.

-dependence on wind conditions -

Associated revenue/profit fluctuations, which can also be seen from the latest half-year figures:

https://www.ecoreporter.de/artikel/nortland-power-wenig-wind-l%C3%A4sst-umsatz-und-gewinn-sinken/

-Low growth, compared to the industry. --

Chart:

Northland has been in a steady downtrend for more than a year. This looks anything but pretty and is also reflected in a low P/E ratio. It could well be that impairment risks and the low growth, compared to the overall market, play a major role and thus the short-term confidence has been somewhat lost.

Analyst estimates [15]:

Buy: 6

Increase: 9

Hold: 0

Reduce: 0

Sell: 0

Conclusion:

Nortland Power is a well-positioned company with good margins. The low growth rate is particularly disturbing, which is why I do not assume a favorable valuation. Nevertheless, a good dividend yield remains (therefore possibly something for @Simpson or @GoDividend 😁). A first entry could soon become interesting, although one should first invest with a smaller tranche to be able to buy more if the price falls.

Let's come back to Northland's strategic goals. Will these be met?

A. Secure and predictable cash flows: As an electric utility, solid and predictable cash flows will certainly be generated. Especially as a slow grower (Peter Lynch) these should also be predictable! However, due to the rather one-sided focus on wind power, one is also somewhat one-sidedly diversified and dependent on wind. There is certainly still some potential here if one wants to position oneself even more broadly for the future.

B. Shareholder value: Certainly given by the dividend. In order to bring about some price stability, one could certainly still think about share buybacks. The share price development is currently anything but good for shareholders. I also see the problem here in the lack of diversification in the business areas and the poor news situation.

C. Good/meaningful strategic orientation: See point A. I still see potential for improvement! One could use the good margins more sensibly and aggressively! Investments in the Asian region are already in the early stage. So a first step is done.

D. Sustainability in the projects: Certainly given. One invests mainly in Asian and European countries with sustainable projects (wind power / PV). I am of the opinion, however, that one could do a bit more. As an electric utility with a green focus, one is still too dependent on the gas business, even if the main revenue driver is the wind farms. It is true that a "NetZero" goal for climate neutrality is proclaimed. However, my subjective perception is that this could progress faster than communicated, since there is already a strong focus on wind.

Net Zero Target - Scope 1, 2 and 3

"As part of the Company's purpose to help build a carbon free world, it is establishing a net zero initiative that aims to achieve zero emissions across its operations by 2040. Efforts will focus on reducing GHG emissions intensity from Scope 1 & 2 by 65% by 2030 (from a 2019 baseline) while targeting a science-aligned net zero across all emissions scopes by 2040. "

https://www.northlandpower.com/en/news/northland-power-announces-2023-financial-guidance_-expands-canadian-development-portfolio-and-establ.aspx

Perhaps the strategy is also somewhat reflected in the Canadian government's climate policy. The CO2 emissions per capita in Canada are 14.3 (Germany 8.1). Greenhouse gases from oil and gas are quite high at 28.2% of total emissions [14]. Therefore, there is definitely still potential!

As always, no investment advice!

At the request of @Malte123
@RealMrKrabs

I hope you enjoyed it 😊

For more analysis, take a look here:

https://getqu.in/XWDDD9/

#theaccountant

#aktienanalyse

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#analyse

#aktien

Sources:

[1]

https://www.northlandpower.com/en/investor-centre/investor-fact-sheet.aspx

[2]

https://www.northlandpower.com/en/about-northland/about-northland.aspx

[3]

https://www.northlandpower.com/en/about-northland/corporate-strategy.aspx

[4]

https://wir-lieben-aktien.de/aktienanalyse/northland-power-aktie-analyse-die-beste-renewable-energy-aktie/

[5]

https://viz.traderfox.com/peer-group-tabelle/CA6665111002/EI/northland-power-inc/aktien-386899-2673015-386744-15116688

[6]

https://de.marketscreener.com/kurs/aktie/NORTHLAND-POWER-INC-1411045/fundamentals/

[7]

https://www.northlandpower.com/en/resources/Corporate%20Reports/NPI-2022-Annual-Report-FINAL.pdf

[8]

https://www.northlandpower.com/en/resources/Corporate%20Reports/2023%20Q2%20Quarterly%20Report_%20ENG.pdf

[9]

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datacurrent.html

[10]

https://de.statista.com/statistik/daten/studie/170383/umfrage/inflationsrate-in-kanada/

[11] https://www.ceicdata.com/de/indicator/canada/policy-rate

[12]

https://www.ceicdata.com/de/indicator/canada/government-debt--of-nominal-gdp

[13]

https://strategyinvest.de/6-typen-von-aktien-nach-peter-lynch/

[14]

https://www.gtai.de/de/trade/kanada/specials/kanada-volle-kraft-fuer-den-klimaschutz-795782

[15] https://de.marketscreener.com/kurs/aktie/NORTHLAND-POWER-INC-15914416/analystenerwartungen/

[16]

https://aktie.traderfox.com/visualizations/CA6665111002/EI/northland-power-inc

Graphs:

Facility and Office types:

https://www.northlandpower.com/en/resources/Corporate%20Reports/NPI-2022-Annual-Report-FINAL.pdf

https://search.abb.com/library/Download.aspx?DocumentID=4CAE001371&LanguageCode=en&DocumentPartId=&Action=Launch

Company homepage:

https://www.northlandpower.com/en/index.aspx

How old is the Getquin Community?🖐

I would like to know how old you are. Please give me a reaction. Also, feel free to write more info in the comments.

🦍 = U20

😭 = 21-25 years

😂 = 26-30 years

🆘 = 31-40 years

🚀 = 41-50 years

❤️ = Ü50

#umfrage
#umfragen
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#alter

Economy on 04.11.2022...

last trading day of the week with a special ⤵️

To the special there is later still a separate contribution. Today stand out for me above all the weekly closing, this yet very volatile week. We had a lot of mixed numbers:

In this article you will find all the figures from yesterday https://app.getquin.com/activity/OEUDxXrlWr?lang=de&utm_source=sharing

and the FED meeting. In the next week are then mainly rather the numbers of European companies. Today, I still have the figures from Vonovia. They interest me very much.

Which figures are still missing for you, on which you still look in the near future?

Economic data

08:00

• DE: New orders September seasonally adjusted PROGNOSIS: -0.5% yoy previous: -2.4% yoy
  

08:45

• FR: Industrial Production September PROGNOSE: -0.7% yoy previous: +2.4% yoy

09:30

• DE: Governing Council member Nagel, speech at G7 CeBaDi Diversity, Equality and Inclusion Summit 2022

09:45

• IT: Purchasing Managers' Index/PMI non-manufacturing October

PROGNOSIS: 48.4 previously: 48.8

09:50

• FR: Purchasing managers' index/PMI non-manufacturing (2nd release) October PROGNOSIS: 51.3 1st release: 51.3 previous: 52.9

09:55

• DE: Purchasing Managers' Index/PMI non-manufacturing industry (2nd release) October PROGNOSIS: 44.9 1st release: 44.9 previously: 45.0

10:00

• EU: Purchasing Managers' Index/PMI non-manufacturing Eurozone (2nd release) October PROGNOSIS: 48.2 1st release: 48.2 previously: 48.8 Purchasing managers' index, total PROGNOSIS: 47.1 1st release: 47.1 previously: 48.1
• DE: Expert Council for Climate Issues, PK on the publication of the biennial report on the state of climate policy in Germany

10:15

• ES: ECB Vice President De Guindos, speech at conference of Naturgy Foundation and IESE Business School

10:30

• EE: ECB President Lagarde, speech at conference of the Estonian Central Bank

11:00

• EU: Producer Prices September Eurozone PROGNOSIS: +1.6% yoy/+42.1% yoy previous: +5.0% yoy/+43.3% yoy

11:30

• DE: Government-PK, Berlin

13:30

• UK: ECB Banking Supervisor Enria, Speech at Cumberland Lodge Financial Services Summit
• US: Labor Market Data October Employment ex Agriculture PROGNOSIS: +205,000 yoy previous: +263,000 yoy Unemployment rate PROGNOSIS: 3.5% previous: 3.5% Average hourly earnings PROGNOSIS: +0.3 yoy/+4.7% yoy previous: +0.3 yoy/+5.0% yoy

15:00

• US: Fed Boston President Collins. (2022 FOMC voting member), speech at Brookings Institution

Untimed:

• CN: Chancellor Scholz, talks with President Xi Jinping and Premier Li Keqiang as part of China trip (to Nov. 5), Beijing
• DE: G7, final meeting of foreign ministers (from Nov. 3), Münster
• EU: Rating reviews for:

France (Fitch), Ireland (Moody's)

Norway (Moody's)

Quarterly figures / Corporate dates Europe

06:30 Societe Generale quarterly figures

07:00 Vonovia 9 Months Results

07:30 Gea Group | Krones | Erste Group Bank

07:30 Andritz quarterly figures

07:40 Telefonica quarterly figures

08:00 RTL Group Sales 3Q

08:30 Amadeus IT Group 9 months results

No time stated: Intesa Sanpaolo SpA

#vonovia
#news
#newsroom
#boerse
#börse
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#community
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#wirtschaftswachstum

Best trading day in my shareholder history!

Hello stock market players,

today was an insane trading day and I generated a performance of 5.01% thanks to the tendency of lower inflation in relation to expectations.

How was your performance write it in the comments and feel free to respond with an emoji!

🦍 = 0-1%

😂 = 1-2%

🆘 = 2-3%

🚀 = 3-4%

❤️ = Ü4%

#aktien
#aktie
#geld
#investieren
#finanzen
#dividende