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Mobile TV and internet provider Freenet made purchases from the MediaMarkt CECONOMY group. This is good for the company and its shareholders for several reasons
The Background
Already in 2016, Freenet (WKN: A0Z2ZZ) has attracted attention with an interesting agreement. At the time, it was the mobile phone operator Sunrise Communications (WKN: A14M5T) of Switzerland. Nearly a quarter of the shares have since held the Germans and this has paid off. While the company is currently thinking of a profitable exit, management has already identified a new target: CECONOMY (WKN: 725750) with its Saturn and Media markets.
For 277 million euros at the rate of 8.50 euros, a 10% share was acquired. Money reinforces the sick balance sheet of the retail group. His participation in the Metro (WKN: BFB001) had recently lost much value.
What Freenet got
Freenet is looking for solidarity with a major distribution partner. In the electronics markets, mobile phones have long been using mobile debitel corners. Additional cooperation until at least 2022 was decided last year. Other groups of products around the Heimvernetzung and Internet TV have to be distributed together.
This is only while Freenet can secure its position in this powerful commercial network. But financially I think Freenet has managed a coup d'etat. The course CECONOMY fell in recent months from more than 13 to about 8 euros. This seems like a good start, as the MediaMarkt group's strategic development is in full swing and promises to succeed
How could this happen?
Some of the money paid out should be paid in the coming years. If Metro gets the curve – and I guess – it also looks more friendly in the balance sheet and the course of action CECONOMY should also be boosted.
For Freenet's shareholders, there is a good chance that their group will continue to be active. Will be able to pay stable dividends or even slightly higher. With the current reduced level of about 22 euros and an upcoming dividend of 1.70 euros, investors would end up with a dream return of 7.5%. Other increases in the future are realistic since earnings per share are still above this level.
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Ralf Anders does not own any of the shares mentioned. The Motley Fool does not own any of the mentioned actions.
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