01. October 2020 | 13:35 CET
Aurelius, Lukoil, SolGold: What do the jacks-of-all-trades on the stock exchange offer?
Those who can do a little bit of everything can go far in the professional world. Currently, the discussion about "neo-generalists" is dominating the career pages. In a world of change it is advantageous to be knowledgeable in many varied sectors, but experts criticize half-knowledge and half-baked proposals from the professional jack-of-all-trades. There are companies on the stock exchange that offer a colorful bouquet of activities. Often, the market does not initially assess this adequately. One example is the investment company, Aurelius. Whenever opportunities for acquisitions arise in promising sectors, Aurelius snaps at them. The result is a varied bouquet of investments. Aurelius itself supports the companies and plans to sell them again after successful restructuring. At present, the company has a full exit pipeline, but the market environment seems a little unfavorable given the crisis. However, diversity can pay off here - after all, not all industries are equally affected.
time to read:
ISIN: GB00B0WD0R35 , DE000A0JK2A8 , US69343P1057
Aurelius discourages short-term investors
The crisis threatens fundamentally healthy companies. For an investment company like Aurelius, this can open up great opportunities, but the company is not doing so well on the stock market. Despite a price-earnings ratio of around 5, the share price is not getting off the ground. Some shareholders are afraid that the crisis will delay distributions. Many investors who want to see money quickly have taken their leave of the share.
On a one-year horizon, Aurelius lost a whopping 63%, even though the company recently quintupled its earnings (EBITDA) to € 187.3 million in its nine-month figures. Nevertheless, the share price did not get off the ground. It seems that many investors are still shying away from the large number of companies in the Aurelius portfolio and see the business model as a burden rather than an opportunity.
Lukoil is no longer a pearl of value
The market has paid little attention to the Lukoil share for years. However, this is primarily due to the origin of the oil company: Russian shares have been in a difficult position since the beginning of the sanctions and are little appreciated by investors. Lukoil covers the entire value chain along with oil production and even has petrol stations on offer.
The Corona crisis and the lockdown in China hit Lukoil early on and caused the company to make losses in the first half of the year. Sales alone have fallen by a third. The reason was also the cutbacks in funding for Opec+. In the meantime, the price-earnings ratio of the Lukoil share is back in the double digits at around 15, after having been well below 5 for years.
On a one-year horizon, the Lukoil share lost more than thirty percent and is no longer considered undervalued due to the decline in profits. Nevertheless, the company has a lot to offer: Lukoil is sitting on large oil reserves and continues to hold on to its dividend. The company is currently paying out more than 10% of its share price to investors. This is a solid starting position for long-term investors who believe in a relaxation of the political situation and a comeback of oil prices.
SolGold dances at many weddings - focus in Ecuador
Investors of SolGold do not have to hope and wait - after all, SolGold focuses on copper and gold. The British-Australian exploration company was one of the first companies to secure extensive raw material rights in Ecuador. The company is active in Australia and the Solomon Islands and has various subsidiaries accordingly.
At the heart of the company is the Alpala project in Ecuador, in which the company has an 85% stake and for which a preliminary feasibility study is currently underway. The Company recently released details of the study and confirmed that there will be no changes to the previously published resource estimate. There have only been delays in certain areas, which the company now hopes to catch up on as soon as possible.
The fantasy around SolGold is quite different: Besides Alpala, the company has thirteen other projects in Ecuador. In the long term, this should create synergy effects. For this reason, too, the company pushes all projects forward equally and thus ensures a continuous news flow. All projects are located in the middle of the promising Andes belt.
Promising prospects for copper and gold
Although the SolGold share has already gained almost 20% on a one-year horizon, the market is cautious about the company's prospects. Unlike many comparable companies, SolGold has significantly fewer projects that are neglected. This should justify higher ratings.
Companies such as Newcrest Mining, BHP Billiton, or Franco Nevada have also recognised that SolGold's approach can be promising and have invested in SolGold projects. As with Aurelius or Lukoil, it can be worthwhile for investors to take a closer look at all the projects and examine their potential. In contrast to other industries, the current timing seems to be favorable for companies involved in copper and gold mining.