March 2nd, 2021 | 09:15 CET
Barrick Gold, Deutsche Rohstoff AG, K+S: Beating inflation by a whisker
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Barrick Gold: Giant without a target
The share of Barrick Gold currently provides negative headlines. While the gold price is weakening, the share price of the largest gold producer is crumbling away. Last year, Barrick Gold still scored with billions in free cash flow and a special dividend. But these effects have now wholly evaporated. In the last three months, the stock has fallen by a whopping 20%. And all this despite the fact that Barrick Gold can continue to mine profitably at current gold prices. So why this price drop?
There are exaggerations on the stock market - these apply to the upside and the downside. The current rising yields in the bond market feed the hope of rising interest rates. Higher interest rates make gold less attractive compared to the US dollar. In addition, Barrick Gold currently does not know where to put its money. The Company would have to invest but has hardly any goals in mind. The fact that the Company wants to get a foot in the door with copper shows how challenging the situation is. Despite a low valuation, the stock is not getting on track. Nevertheless, those who think long-term and can endure a lean period can take a closer look at Barrick Gold.
Deutsche Rohstoff AG: Inflation winner with an exciting portfolio
The Deutsche Rohstoff AG share is already managing to make any inflation fears evaporate. The reason: The Company is an oil producer and profits from the rising prices of the "black gold." If you look at Brent crude oil's price chart, it has already left the crisis completely behind. Deutsche Rohstoff AG continues to be involved in tungsten and gold and holds minority interests in existing companies. One of the centerpieces is the share in Almonty Industries. The tungsten company is currently bringing the largest tungsten mine outside China into production and already has producing mines in Spain and Portugal.
Deutsche Rohstoff AG's share price has risen by a whopping 40% over the past three months and is currently preparing to break out of its multi-year downward trend. The Company has been on the market for many years, has a great deal of expertise in commodities, and boasts a diversified portfolio. The Company, which produced up to 8,000 barrels of oil a day before the crisis, could be an exciting choice, especially for investors who want to add commodities to their portfolio as a hedge against inflation.
K+S: Uncertainty remains in the end
For many months, the K+S share was also considered an attractive choice for commodity investors. But then irregularities brought BaFin onto the scene. The supervisory authority suspects an error in a write-down of around EUR two billion. As the MDAX-listed group's balance sheet is already considered to be troubled, the consequences of the latest scandal could be far-reaching. Previously, the outlook for K+S seemed rosy: The Group had just sold its struggling US business and was preparing to take off again, boosted by the favorable situation on the market. The share price has recovered some of the losses in the wake of the recent incidents, but the bottom line remains uncertain. Although K+S appears to be predestined as an inflation investment, investors would be better advised to wait and see.
The Deutsche Rohstoff AG share could prove to be a more suitable investment. The Company has several irons in the fire and, as an oil producer, scores points with the "inflation commodity" par excellence. Also, further impetus could come from the imminent openings of major economies. Since the high inflation rates have not yet had a positive impact on gold, Barrick's stock remains only the second choice in a direct comparison.
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