Close menu




September 8th, 2020 | 07:09 CEST

Barrick Gold, Gazprom, Scottie Resources: Who convinces the market?

  • Investments
Photo credits: pixabay.com

To be noticed by the market, it takes more than just a big name. Learn how investors can invest in a phase of global money flood.

Still completely on the low in March, commodity stocks have been developing a strong dynamic for months. The reason: despite the pandemic, demand for copper and even crude oil has not slumped significantly. In the case of gold, demand is even rising continuously. This is due to the measures taken by governments and central banks to combat the crisis. As was the case during the great financial crisis, state institutions are supporting the markets with liquidity. This drives not only gold and other precious metals but also other commodities. But how should investors invest in this market environment?

time to read: 3 minutes | Author: Nico Popp
ISIN: CA0679011084 , US3682872078 , CA81012R1064

Table of contents:


    Barrick Gold: Market ignores outstanding development

    When it comes to gold mining, Barrick Gold has been the company first mentioned by many investors for years. In fact, Barrick is the market leader - no other company produces more gold than the Toronto-based group. To ensure that this remains the case, Barrick Gold has made repeated acquisitions in recent years: in 2006, it took over Placer Dome and in 2019 it acquired Randgold Resources. In the meantime, the gold giant has bought many other smaller exploration companies. Even before the start of the gold boom in the wake of the Corona Pandemic, Barrick's figures improved significantly and management proposed to increase the quarterly dividend by 40%.

    Despite the positive business development, the company plans to divest several unprofitable projects by the end of the year. In view of the increased gold price, this step could even generate more funds in Barrick's coffers than expected. Despite the formidable outlook for the gold sector in the face of global money supply expansion, Barrick Gold's share price is not really getting off the ground and even when gold broke through the USD 2,000.00 mark, it did not mark new highs. The stock is still trading at the April level today. And this despite the fact that a price-earnings ratio of only 15 would leave room for improvement given the market environment.

    General political weather conditions rather unfavorable for Gazprom

    Gazprom shares also offer price potential - at least superficially. The Russian oil and gas company has been captivating for a long time with low valuations and is currently making a name for itself with a price-earnings ratio of just over two. On top of that, a double-digit dividend yield is also on the cards. The world's largest natural gas company controls around 7% of the world's reserves and sees potential in its business with China and in the production of liquefied gas.

    In the wake of the incidents surrounding the Russian opposition activist Alexei Nawalny and the German discussion about ending the construction of the Nord Stream 2 gas pipeline between Russia and Germany, the share has come under pressure. This confirms Gazprom's share's longstanding status as a value trap. Value traps are shares that are considered to be favorably valued on the basis of fundamental ratios, but which nevertheless experience no demand on the market.

    Scottie Resources also has good timing for acquisitions

    A completely different case is the Canadian gold company Scottie Resources. Just yesterday the share price in Germany picked up dynamically again. The company operates in the so-called "Golden Triangle" of the Canadian province of British Columbia and owns the Scottie Gold Mine there. The mine produced more than 95,000 ounces of gold between 1981 and 1985 and impressed with high gold grades. The company is currently exploring adjacent regions and expanding the deposits on its property. The goal is to resume production at favorable conditions. Similar to Barrick Gold, Scottie was able to make additional purchases during a quiet market phase: In April 2019, Scottie Resources secured an adjacent property and expects this to provide additional potential. Scottie is also pleased to report that the company appears to be solidly financed with approximately CAD 5.0 million in cash.

    Although Scottie Resources is a very small company with a market capitalization of approximately EUR 40 million, investors have already recognized the potential: Since mid-June alone, the share price has risen by more than 40%. While the gold boom is largely bypassing the market leader Barrick Gold and companies like Gazprom are suffering from the general political situation, shares of smaller companies that have already been recognized by the market as promising appear to be an exciting niche.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

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

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    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.

    About the author



    Related comments:

    Commented by André Will-Laudien on January 20th, 2022 | 12:51 CET

    Alibaba, Hong Lai Huat, Tencent: Now things are really taking off!

    • Investments

    The Asia region remains on the growth path. The economies of China, Singapore, and Indonesia achieved 4.5 to 6.5% growth in 2021. Prosperity is not yet comparable with the West. But the developed zones around the metropolises have already shown high momentum for years. The real estate market, in particular, is booming in China as well as in Hong Kong, Singapore and Japan. It is uncertain how long the low interest rates will continue to support these markets because the Federal Reserve has already announced that it will exit the liquidity bubble. Who can surprise in the current environment?

    Read

    Commented by Mario Hose on January 20th, 2022 | 11:08 CET

    Cardiol, Novavax, Valneva - Why it's worth buying now!

    • Investments

    The trading week is coming to an end and on Thursday the German benchmark index DAX continues to trade below the psychological mark of 16,000 points at a level of 15,785 points and an increase of 0.10%. The rest of today and Friday remain to make a jump. It will probably depend on the guidance from the U.S., but at the hour, U.S. futures are all green. MDAX last traded at 34,135 points (+0.07%), TecDAX at 3,544 points (+0.07%) and SDAX at 15,626 points up 0.33%. Companies from the biotech sector are again in the focus of the investors today.

    Read

    Commented by Mario Hose on January 19th, 2022 | 14:51 CET

    Trading shares in focus: BrainChip, Gazprom, Saturn Oil + Gas

    • Investments

    The German indices have reached on the second day of the week after a bumpy start to trading now again positive signs. The German benchmark index DAX traded at a level of 15,824 points and thus around 0.28% in the plus, in the daily low has held the mark of 15,600 points and since then goes upwards. The MDAX last traded at 34,172 points (+0.05%), TexDAX at 3,532 points (+1.28%) and SDAX at 15,613 points with 0.03% up. Exciting individual stocks offer interesting investment opportunities.

    Read