March 21st, 2022 | 13:10 CET
Attention - MorphoSys, Valneva, CureVac, MAS Gold: These shares smell of a turnaround!
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
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.
MorphoSys - Poor figures, improved chart technique
The poor 2021 annual figures for MorphoSys were expected. In addition to a slump in revenues and painful write-downs, the Company also slipped deep into the red. Because MorphoSys ultimately abandoned several preclinical programs with drug candidates of the new US subsidiary Constellation Pharmaceuticals, a total of a quarter of a billion euros now had to be written off.
A 45% drop in sales to EUR 179.6 million and a significant increase in research and development costs have impacted the operating result considerably. Here, the Company reported a loss of EUR 508 million after a profit of EUR 18 million in 2020. Analysts at Barclays Bank pointed out in an initial assessment that the results were in line with the group's announcements from January. The share price reaction to the figures therefore remained restrained, after a few hours it went up only slightly.
The Company is now looking ahead to the new year with hope. MorphoSys is counting on a boost from its cancer drug Monjuvi, for which the Management Board again confirmed the sales forecasts. The Munich-based biotech Company is currently undergoing a transformation from contract researcher to developer of its own pharmaceuticals. The most important source of hope remains the cancer drug Monjuvi, which is expected to generate sales of between USD 110 million and USD 135 million in the current year. Last year, antibody therapy generated initial sales of USD 79.1 million, and progress has finally been made here in the US.
The Munich-based company will spend more than EUR 300 million on research and development in 2022, with overhead costs of at least EUR 155 million. But do not worry: MorphoSys estimates its cash and cash equivalents at the end of 2021 at around EUR 977 million. From a chart perspective, things are not looking bad for the MorphoSys share. The double low at around EUR 21 was reached twice, and the current breakout is dynamic. A new position or subsequent purchase makes sense, with the share 83% below its high.
MAS Gold - Good prospects for the gold explorer
In this time of crisis, gold is going on a real roller coaster ride. Initially sought after as a fear currency, the yellow metal stood at USD 2066 in March, already USD 100 higher. However, the hopes of an imminent easing of tensions in Ukraine are rising, and the price for an ounce is coming under strong pressure. The bottom line is that nothing happened; the spot price was again at USD 1,930 yesterday - the same level as last summer. However, if the crisis worsens again, the buybacks are likely to resume.
In contrast to conventional investment vehicles such as ETFs or ETCs, a number of listed development companies allow speculative positioning in the precious metal. One of these is MAS Gold, a Canadian explorer based in Saskatchewan. The Company owns an interesting property called Contact Lake. In the years 1994 to 1997, a mine of Cameco Corp. existed here, but the production was not very profitable due to low gold prices of USD 250. MAS Gold's properties cover more than 34,700 hectares, forming the La Ronge gold belt. Together, the properties provide medium- to near-term production targets and access to processing facilities and associated infrastructure. Historically, the Greywacke North and Contact Lake zones have had ore grades of 4 to 6 grams AU per tonne, with approximately 188,000 ounces already produced.
MAS Gold has now completed drilling on its Preview North property at the North Lake deposit. A total of 4,123.5 meters in 34 diamond drill holes have been completed, and samples are currently being processed and delivered to SRC Laboratories in Saskatoon. Ongoing drilling is expected to continue during March as the next phase of the program moves to the Point and Preview SW deposits. Subsequently, MAS is targeting the completion of a consolidated resource report and preliminary economic assessment (PEA) in 2022.
Mining veteran Jim Engdahl believes in a resource of up to 5 million ounces of gold, and he engages investors, including Eric Sprott. The shares are currently still dormant at around CAD 0.10, and turnover is manageable. The total of 141 million shares currently leads to a very low valuation of CAD 14 million. However, the projects are first-class, so there should still be some surprises in the current year.
CureVac versus Valneva - Two times 17 is 34
Back to the biotech sector once again. Parallel to the meteoric development of BioNTech and Moderna, CureVac and Valneva have experienced only partial price jumps and recently trended hand in hand downwards in the sector sell-off. However, the tide has turned.
CureVac initially had very high hopes but ultimately had to unhappily drop its research on the first-generation COVID vaccine. At its peak, the Company had a market capitalization of almost EUR 24 billion; today, at a share price of just under EUR 18, it has a market capitalization of just EUR 3 billion. Meanwhile, CureVac continues to place great emphasis on the RNA Printer, which will be used to develop vaccines and RNA therapeutics in the future. The share now seems to have found a bottom and is rising dynamically. The speculator is risking a renewed footing.
It has recently become quieter around competitor Valneva. But the approval for the inactivated vaccine by the European Medicines Agency (EMA) is probably due for the Austrian-French manufacturer as early as April. Although the agency still has some follow-up questions about the active ingredient, experts describe these steps as a normal process. In addition, there are renewed outbreaks in China, warnings of new virus variants and oversold charts. Since the sell-off on March 4 down to EUR 11.80, the share price has been rising steadily. From a chart perspective, resistance at EUR 18 is now within reach. It will not be surprising if both CureVac and Valneva manage a temporary doubling to EUR 34 in the current year through good news. The price risk in the case of bad news is, of course, always given to the values.
The nightmare of war and destruction masks the worries about Corona. In parallel, inflation is rising to unimagined heights so that precious metals are becoming in vogue again. But the timing problem remains in view of high volatilities. Those who do not want to invest in the strongly fluctuating biotech shares can position themselves in the promising MAS Gold as an admixture.
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.
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