11. October 2021 | 12:02 CET
Adler Group, Barsele Minerals, Deutsche Telekom: Everything is at stake
The real estate market in China is shaky. A European real estate company has been the subject of speculation recently. Hedge funds have accused the Luxembourg Company Adler Group of irregularities. Is this the beginning of a bear market? Is the next crisis looming? Or will everything turn out all right in the end? We take a look at three exciting stocks of the moment.
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ISIN: ADLER GROUP S.A. NPV | LU1250154413 , BARSELE MINERALS | CA0688921083 , DEUTSCHE TELEKOM ADR 1 | US2515661054
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Adler Group: Is there still hope?
The Adler Group is in the sights of Wirecard hunter Fraser Perring. The real estate developer is allegedly guilty of accounting fraud. What is true about the allegations remains unclear. Under the presumption of innocence, the focus around Adler Group should now be on proving and clarifying the claims. That could be difficult given the situation at Adler itself: The Company is regarded as non-transparent and heavily indebted. Around real estate projects, there are always changes of ownership or changes of plans. That makes it even more difficult for outsiders to gain an overview of the situation.
Fraser Perring's accusations weigh heavily: Adler would deliberately act in a non-transparent manner to enrich itself with shareholders and bond creditors. But what is really true about the accusations? The fact that corporate actions do not correspond to shareholders' expectations is nothing new, nor is it a punishable offense. But the market has already passed its verdict: the share price fell by more than 20% in the past five days. But it also looks terrible on a year-by-year basis - the 72% drop in three years speaks volumes. The share was and is uninteresting. However, should Adler create transparency in light of the allegations, this could even be an opportunity for the Company in the long run.
Barsele Minerals: What will happen by the end of the month?
The share of Barsele Minerals is also considered a long-term opportunity. The Company has reached an agreement with commodity producer Agnico Eagle to purchase the Barsele property in Sweden. The small Company has until the end of the month to wrap up the deal. It already holds a 45% stake in the Barsele project, which is said to offer the prospect of 5 million ounces of gold and is located in a prospective region in Sweden.
The remaining 55% is to change hands for CAD 45 million. In addition to the cash, Agnico Eagle is also to receive 14.9% of the shares of the previous junior partner, as well as options. Already a few years ago, analysts at RBC valued the Barsele project at USD 375 million. The shares of Barsele Minerals have declined significantly in recent weeks - no doubt, the prospect of a capital increase and associated dilution of the shares are weighing on the price. However, with the stock trading in the area of the 52-week low, the market may have exaggerated to the downside. The situation around Barsele Minerals is coming to a head by the end of the month. However, since the team around CEO Gary Cope is fully convinced of its project (see the interview from July), the value could be worth a closer look.
Deutsche Telekom: This share is super-solid
Whether financing materializes or under what conditions is not an issue for Deutsche Telekom shareholders. The telecommunications company generates capital month after month. The Bonn-based Company distributes this cash flow to shareholders in the form of a dividend - around 3.4% is currently available in dividend yield. Although the "pink giant" has made a name for itself in Germany, analysts currently see Deutsche Telekom shining more because of its good US business. T-Mobile USA's revenues and the number of new customers are good. But T-Systems' systems house business has also developed well recently. Broadband lines are also growing as a bread-and-butter business in Germany. That means that no sector is a problem child at Deutsche Telekom.
The share has recently fought its way above the EUR 18 level and could also gain new momentum against the backdrop of rising inflation. Companies with steady cash flow are considered good choices in times of inflation. Deutsche Telekom is boring but not a poor choice for conservative investors.
On the other hand, those who like it more speculative can look at Barsele Minerals. Here, it is not yet clear how things will develop, but despite the pending sale process around the Barsele project, the Company has tangible values in its portfolio with its 45% stake. How solid the values are at Adler, on the other hand, remains an open question. Investors should remain observers here for the time being.