December 15th, 2022 | 12:09 CET
100% turnaround opportunities for 2023: TUI, Uniper, Desert Gold, FlatexDEGIRO - The New Year's Eve bangers!
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"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Uniper - What a bailout disaster!
The Uniper issue is likely not over yet. After several announced bailout measures, another EUR 25 billion still needs to be added to the coffers to guarantee the upcoming gas deliveries to the municipal utilities. In the coming days, the EU Commission will continue to discuss whether to approve the utility's nationalization plans. According to media reports, the board's greatest fears may now be realized, as Brussels is reportedly demanding that the utility divest its operations in the Netherlands for approval. So far, there have been no official statements on the review process, neither from the Group itself, the German government, or the EU Commission. The announced deadline for examining the plans is to run until December 16 because next Monday, the extraordinary general meeting must first approve the quasi-nationalization. Among other things, Uniper operates a hard coal-fired power plant with a capacity of around one gigawatt and smaller gas-fired power plants with a combined capacity of over 500 megawatts in the Netherlands.
At its peak, Uniper was making losses of EUR 200 million a day on gas procurement. In order to avert insolvency, the Group has meanwhile agreed on a stabilization package with the German government and its previous majority owner Fortum. The Fortum subsidiary has already accumulated a loss of over EUR 40 billion in the first 9 months of the year and has long since used up its balance sheet equity. Due to the lack of deliveries by Gazprom, the utility has filed for arbitration against the Russian state-owned Group in the Swedish capital Stockholm to claim damages. Why the share price is still around EUR 3 is more than astonishing from a fundamental point of view. Even if Uniper is kept alive via nationalization, its prospects are more than uncertain. They will deteriorate further if the gas price remains high and the Group also has to sell its business in the Netherlands.
Desert Gold Ventures - The super project in Northwest Africa is moving forward
Gold and silver have been back on investors' buy lists for days. Some American brokers have raised their price targets for gold to between USD 2,000 and 3,000. The background to this assessment is the continuing inflation trend and the efforts of many investors to achieve real value retention over time. Those who accumulated gold at the end of the 1990s, for example, were able to achieve a gross return of 8.9% per annum in 25 years. Standard stocks did not manage that, and bonds had their heyday only until 2021. Since there are rumors that storm clouds are gathering again in the European banking system, gold and silver have shown a remarkable recovery movement. The planned abolition of cash also provides reasons for an impending gold shortage if the plans of the central banks and the erroneous opinions of some politicians become a reality.
Canadian explorer Desert Gold Ventures (DAU) had excellent exploration success to date at its SMSZ gold project in Mali, most recently reporting a gold recovery rate of 88% on estimated resources of 1.1 million ounces. With metallurgical samples returning good results at the Mogoyafara South zone, the announced 35,000-meter drill program will be rigorously pursued. In the immediate vicinity are mine operators such as Allied Gold, Barrick and Endeavour, which together can already show over 5 million ounces of production from Mali. Unfortunately, the Desert Gold share (DAU) also got caught in the fiscal selling vortex at the end of the year. Despite good drilling results, the stock has now lost about three-quarters of its value in 2022. However, Desert could report strong interest at current levels, as a full 24.3 million shares were placed with investors at CAD 0.07. When gold completes the announced broker rally, it acts like a summer breeze for low-cost explorers. The stock already quintupled in 2020 from a standing start, while gold gained about 30% in the same period. Collect!
TUI and FlatexDEGIRO - Even lower, or is that it?
TUI is again asking its shareholders to pay up. The world's largest travel group senses a chance to return to the black after two loss-making Corona years. However, high inflation and the threat of an economic downturn could dampen the renewed enthusiasm for travel among Europeans. Nevertheless, the new CEO, Ebel wants to tackle the repayment of the outstanding state aid as quickly as possible; unfortunately, the expected profits are insufficient. Shareholders are therefore being asked to inject billions more. At the end of the year, when liquidity is low, this does not go down well, and the share price loses a good 9% to EUR 1.57. From a chart perspective, the EUR 1.20 mark should no longer be seen, but the planned share cut will technically move the price into other realms. Institutional investors can thus also take hold again. Fundamentally, there are almost no reasons for a commitment, and technically, the first buy signals are lurking above EUR 1.80. The share remains highly speculative but is popular with momentum traders.
It seems that the FlatexDEGIRO share is completely off the rails. The German financial regulator BaFin subjected the Company to a special audit and found deficiencies in its organization and corporate governance. At the same time, the board cut its already muted forecast for the current year. Last week, the stock then also plunged more than 30%. Stock market traders spoke of disastrous news. Analysts reacted in a huff and collectively downgraded the online broker. The previously optimistic houses, such as Exane BNP and Oddo BHF, even cancelled their buy recommendations altogether. Insiders may not see the situation as serious and increased their holdings. CEO Frank Niehage increased his position by about 70,000 shares. Fundamentally, FlatexDEGIRO is growing strongly: from 2019 to 2021, the number of transactions processed has increased more than sevenfold from 12 to 91 million, while customer assets under custody have almost tripled from EUR 14.5 billion to over EUR 40 billion. By the end of September 2022, customer connections had grown by over 500%, from 390,000 in 2019 to 2.4 million. If those responsible at Flatex can answer the BaFin questions positively, a strong rebound in the stock should be on the cards. There are, therefore, also positive voices: Jefferies maintains its BUY rating with a price target of EUR 13. Keep watch!
The last month of the botched investment year 2022 has begun - currently, closures reign at the end of the stock market year. The DAX remains in an increased waiting position regarding whether a recession will appear in 2023. Small caps such as TUI, FlatexDEGIRO and Desert Gold have suffered major setbacks and could become shooting stars in 2023.
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