At Housewifetrading.com, we bought few shares of Borussia Dortmund GmbH.
With a slogan “Echte Liebe” that the club itself would translate as “Real Love”, even if “Real Passion” feels a better fit, Borussia Dortmund GmbH is a solid leisure holding with a very strong track records of good performance in the Champions League, Bundesliga and domestic cups within the last years.
Here couple of elements how we based our decision :
- Owns its stadium. This seems to be the key. Only very few players in Europe own their stadium. It generates massive additional income. Sponsoring, concerts, national games. Most of the best ranked clubs in the KPMG Football valuation benchmark own their stadium.
- One of the highest market cap among the publicly traded football team. While still maintaining an acceptable net profit margin > 2%, low level of debt compared to the industry and paying out dividends to shareholders. More information here.
- Good entry level to buy according to technical analysis
- High confidence in future financials. Despite the poor results since the last couple of months, Borussia Dortmund GmbH has strong indicator of good future performance. (Massive) Transfer of Dembele for approx 150m€, new trainer has been appointed, 3rd position in Bundesliga so high chance of playing Champions League in 2018/2019 and potential sale of Pulisic.
- Germany is doing good if not fantastic, so strong economical context.
We placed our order at 6.05€ with a stop loss at 5.5€. And expect levels above 8€ within two years. So risk/return ratio of x3.6 including 1% dividend yield.
The only fear we see in the trade is the poor actual performance of the club, wit strong hope that the new trainer will be able to turn things around.
Please only consider this investment if you can afford to lose it.
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