It is April 28th 2020 and I am back again fully invested. I had sold my stocks on February 19th and after two months staying in cash I decided to go full in stocks again. The virus peak seem is over and the number of the new infected people is going down.For the last two weeks I checked what is cheap out there. The stocks I like are Microsoft, Amazon and Google however their prices are still too high and expensive so I decided to go for something cheaper having potential to make about 50% up in the next one year period.
The first stock is Deutsche Bank (DBK)
Deutsche Bank is down around 40% from its highest point this year and the bank is in transformation period. It is the biggest German bank and I believe that it will make the turn around.
Two days ago they announced a profit for the first quarter for 2020 when almost everybody expected a loss. Many things could be said about Deutsche Bank, most of them negative, however for the first time since 2009 crisis they are taking serious steps for transforming the business and if they succeed the share price in a year period I expect to be much higher than today's, at the time of writing it is 6.26 EUR. Of course there are many risks in the sector, the interest rates in the Euro area are still in record lows and having the current situation they will most probably continue to stay at these levels for at least two years.
The second buy is Lufthansa(LHA)
The airline's stock price is at its lowest levels for the last 25 years. Airlines are not companies I like but if you buy them at good prices the payoffs could be very good. Lufthansa's stock has gone to these levels many times in the last 25 years and always recovered. I expect the flights to start again in June and most probably they won't go to the pre-crisis levels at ones but as always happens I expect the share price to start going up in the late summer. After the 9/11 it took 4 months for the price to come to its pre-crisis levels.
The third stock is Unicredit (UCG)
The banking sector in Italy is problematic, Unicredit is not an exception. Four days ago Italy's credit rating was affirmed by S&P which is a good news for Italy's banking sector and as a whole for the country which just to mention has huge debt. Unicredit is one of the few Italian banks with good balance sheet and the share price level at 7 EUR is very attractive for a profitable bank as Unicredit.
I expect the price to go at least above 10 EUR in the next one year period.
The fourth and last stock is IBM (IBM)
IBM is one of the oldest firms in its sector and has gone throw many bad times. The share price compared to other players in the sector is very attractive. They have acquired Red Hat and I believe that with their wide client portfolio they will make good progress in the next years. In the last two quarters they already showed signs for recovery. I bought it at 123 USD for a share and I expect the price to go at least to 200 in the next one year. The P/E ratio is 12 which is also very low for a software company.
Most of you probably will say that this is a very risky portfolio, yes it is indeed. But I guess you will agree that you can not buy cheap when everything is OK, at such times the prices are mostly extremely expensive and mostly it is time to sell.