Close menu




January 25th, 2022 | 11:14 CET

Allkem, Triumph Gold, K+S - Take advantage of price setbacks!

  • Gold
Photo credits: pixabay.com

What moves prices? When reduced to the core, it is supply and demand. So simple and yet so complicated. The forecast or anticipation of the two factors and the pricing of the future is what moves the stock market. Many developments and general conditions speak for rising commodity prices. While the prices of industrial and battery metals have been rising significantly for many quarters, the increases in precious metal prices, on the other hand, have been moderate. Where are the opportunities to take advantage of price declines?

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: Allkem Ltd. | AU0000193666 , TRIUMPH GOLD CORP. | CA8968121043 , K+S AG NA O.N. | DE000KSAG888

Table of contents:


    Allkem - Price drop after a downgrade by UBS

    UBS is one of the best-known and most influential investment banks globally. The word of its analysts carries weight. The strength of this weight can sometimes be seen in the shares of lithium giant Allkem - known as Orocobre and Galaxy Resources, before their merger. The share price has risen by almost 36% to around AUD 11.90 since the end of last year. The Company published its Q4 report only a few days ago, in which all target figures for the quarter were exceeded. Analysts at UBS were convinced that the Company - despite the prospect of an 80% increase in the price of battery-grade lithium carbonate by autumn - had currently exhausted its growth opportunities.

    Thus, despite increasing the price target to AUD 11.20, they downgraded the investment recommendation to "Neutral" due to a lack of share price potential. As a result, the share price plummeted to below AUD 10. We do not consider this decline to be justified. Allkem's fundamentals are very good, the growth potential for the lithium market is high. Moreover, starting in 2024, Allkem will commission its 100% owned James Bay lithium project in Québec, Canada, with construction expected to begin this fall. The share is worth considering for longer-term investors after the share price decline.

    Triumph Gold - Is the next Yukon gold rush imminent?

    On August 16, 1896, a group around "Keish", also known as "Skookum Jim Mason", a member of the "Tagish" people, found gold at the mouth of the Klondike into the Yukon River, triggering the most famous gold rush on the North American continent. The Klondike Gold Rush brought more than a hundred thousand prospectors to the Klondike River near Dawson, led to the establishment of the Yukon Territory, and defined the boundary between Alaska and Canada. The success of the prospectors, known as "stampeders," led to vast quantities of gold on the world market, spurred massive regional inflationary trends, and its demise led to a significant liquidity crisis. In total, some 570 tons of gold have been mined in the Klondike region to date.

    The Canadian exploration company Triumph Gold, in which gold giant Newmont holds a 12.1% stake, operates in this area, which is still rich in gold and copper today. Triumph's 100%-owned Freegold Mountain flagship project, located in the Dawson Range copper-gold belt, covers an area of approximately 200 sq km and hosts three deposits, Nucleus, Revenue and Tinta Hill. Triumph Gold owns 100% of the Big Creek and Tad/Toro copper-gold properties near the Freegold Mountain project.

    An extensive drill program was initiated last summer, about half of which has been completed to date. Among other things, the Company encountered an intersection over a length of 106.5m with mineralization of 0.76 g/t gold equivalent (AuEq) in the Blue Sky Zone (BSZ). More data can be expected soon with the second half of the drilling program, which has been supported for some time by artificial intelligence to identify promising deposits. The share of the Canadians has lost considerable ground in recent months. Currently, a stock market valuation of only CAD 13 million beckons.

    K+S - Share price consolidates at a high level

    The Kassel-based fertilizer group reached two critical milestones at the end of 2021. Following the elimination of antitrust concerns, the joint waste management group Reks was successfully established with Remondis. In addition, the Group passed the audit of its valuation allowances by the German Financial Reporting Enforcement Panel with flying colors. The positive share price performance thus continued in 2022. Since the beginning of January, the share has gained a full 25% in the meantime, followed by profit-taking.

    The prospects for the stock remain good. Demand and price developments are playing into the hands of the Germans. In addition, the shares are valued very low with a single-digit P/E ratio. Analysts at the private bank Berenberg also see it that way and rate the share as a "buy" with a price target increase to EUR 20.


    The high demand for lithium and agricultural raw materials will continue for some time. Allkem and K+S will benefit from this. The factors affecting the price development of precious metals are more complex. However, as a long-term rule of thumb, gold has proven itself as an investment in times of high inflation and great uncertainty. Although higher risk, explorers benefit disproportionately from rising precious metal prices. In addition, Triumph Gold's share price should react positively to project progress.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by Armin Schulz on April 17th, 2024 | 06:45 CEST

    Barrick Gold, Globex Mining, BP - Commodities In the spotlight: Supercycle started?

    • Mining
    • Gold
    • Silver
    • Commodities
    • Oil
    • Gas

    Global demand for commodities is reaching new heights, partly driven by increasing geopolitical tensions. The exchange of attacks between Iran and Israel is a case in point. This conflict, deeply rooted in religious and political differences, continues to escalate and could have far-reaching consequences for international stability and commodity markets. With this latest escalation of the Middle East conflict, security aspects in the global competition for important resources such as gold, silver and copper are taking center stage. China is demonstrating its hunger for resources. However, the price of oil has also risen recently. There has long been talk of a commodity supercycle. Perhaps it has now finally begun. Where should one invest now?

    Read

    Commented by André Will-Laudien on April 17th, 2024 | 06:30 CEST

    Discount battle over: Commodities on the counter-offensive! Rheinmetall, Power Nickel, BASF and Varta in focus

    • Mining
    • Nickel
    • Commodities
    • Gold
    • Silver
    • Defense

    Since the bombing of Israel by Iran, the clocks are ticking differently in the Middle East. The next stage of escalation has been reached. If Israel now uses the right to defense as an opportunity to initiate something bigger, it is here: the conflagration. Gold and silver are shining as safe-haven currencies and pulling long-neglected commodity shares through the roof. Now is the time to keep the sails in the wind and ride the long-awaited upward momentum. In the energy transition, strategically safer jurisdictions that can safely serve the growing hunger for commodities are still in demand. We highlight a few opportunities.

    Read

    Commented by André Will-Laudien on April 16th, 2024 | 07:05 CEST

    The cannons are thundering, and gold and silver remain in demand! Barrick, Newmont, Desert Gold and SMT Scharf in focus

    • Mining
    • Gold
    • Silver
    • Commodities

    The overnight attack by Iran on Israel underscores the current geopolitical uncertainty. Regardless of whether there is further escalation in the Middle East, the world has already changed dramatically since February 2022. This includes shifts in investor behavior. Until the first quarter of 2024, shares in the artificial intelligence and high-tech sectors were bullish; now, defense stocks and precious metals are on the agenda. After decades of disarmament, NATO, in particular, is now facing a decade of rearmament, and private investors are expressing their restraint in consumption by increasing their focus on private security. This is reflected in the increased purchases of gold and silver. For years, precious metals have been stable guarantors of the daily dwindling purchasing power. We believe that the new valuation cycle in the commodities sector is only just beginning, which is why we are examining favorable entry opportunities.

    Read