The Czechoslovak Group presents a study in contradictions. The defence contractor’s order book bulges at €17 billion, revenue hit €1.5 billion in the first quarter alone, and operating profit climbed nearly 9% year-on-year. Yet its share price is trading almost 65% below the January record of €36.05, battered by a short-seller attack that has sent investors scrambling for cover.
The sell-off accelerated after Hunterbrook, a US-based activist short seller, alleged the company had inflated its production capacity. CSG owner Michal Strnad has rejected the claims outright, but the stock still touched a fresh 52-week low of €12.20 during the past week. By Friday’s close, the shares had clawed back 2.71% to €12.75 — a modest reprieve that does little to mask a monthly rout of more than 28%.
Technically, the stock is deeply oversold. The 14-day Relative Strength Index (RSI) stands at 29.8, a level that often attracts speculative buyers looking for a snap-back. But the path to a genuine recovery is steep: the share price is nearly 24% below its 50-day moving average of €16.70, and annualised volatility of 59% underscores the extreme risk for anyone holding the equity.
Should investors sell immediately? Or is it worth buying CSG?
The fundamental picture tells a different story. Europe’s rearmament drive is in full swing, with Norway ordering new protection systems for its Leopard tanks — precisely the kind of land-based defence equipment and ammunition that form CSG’s core business. The European Union has approved fresh frameworks for defence investment, and NATO continues to push its ambitious spending targets. CSG is currently negotiating further orders worth €27 billion, building on its €17 billion backlog.
That record demand must now be converted into cash flow and margin. The management will face its first big test on 7 August, when half-year results are due. Investors will be watching for signs of margin erosion or delivery delays that could validate the short seller’s scepticism. Until then, the €12.20 support level remains the key fault line. A decisive break below that floor would open the door to deeper losses, while any new detail on actual production capacity — or a surprise contract win — could provide the catalyst for a much-needed rebound.
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