July 8th, 2022 | 20:19 CEST
BASF, Amazon, Barsele Minerals - Crisis-proof investments
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"[...] We can make a big increase in value with little capital. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
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BASF - Bumpy second half expected
"Buy to the sound of cannons, sell to the sound of trumpets" is a stock market adage that banker Carl Mayer von Rothschild is said to have said in the 19th century. Industries such as BASF (ISIN DE000BASF111) are having to endure a thunderstorm in Germany. Due to the previous gas supply of 60% from Russia and the current sanctions, alternatives are urgently needed. BASF CEO Martin Brudermüller said this week at the "Industry Day" of the Federation of German Industries (BDI). "We are all happy that in these difficult times the first half of the year was good". He added that the Group would no longer be able to turn the previous difficulties faced by competitors due to strained supply chains to its advantage in the remainder of the year. Increased energy prices and restrained consumption are slowing down business.
The switch to supply alternatives for Germany as a production location is not making much headway. With cooperation partner MAN Energy Solutions, BASF wants to use a feasibility study to determine whether a large-scale industrial heat pump to electrify steam generation at BASF's site in Ludwigshafen am Rhein could reduce CO₂ emissions. This study is to be completed by the end of the year. Brudermüller adds: "In the medium term, we want to reduce our CO₂ emissions by 25% by 2030."
It sounds like a tough effort to make Germany a climate-friendly location. Investors should keep in mind that there is still no end in sight to the high inflation in Germany and Europe. Comparable groups in the Asian region could bring more returns in the coming months. The BASF share price may fall even further given the somewhat muddled energy situation. And it should not be forgotten that a government in Germany is newly elected every four years. The opportunities and risks of getting in on the proverbial sounding cannons should be well weighed by every investor.
Amazon - Boosting sales with Prime Day
On July 12, it is that time again, and Amazon (ISIN US0231351067) is launching its Prime Day worldwide. On this day, all Prime subscribers are in for exclusive special offers, which they can purchase via the shopping platform. Prime is a subscription service that allows users to receive Amazon merchandise at an earlier time and gain access to streaming content from videos to music - all for a monthly fee. However, what sounds like an ad from the teleshopping channel is quite interesting for investors: Amazon has over 200 million Prime members. Sales during Prime Day 2021 on Amazon generated USD 11.79 billion. Amazon Prime has been available in 22 countries since October 2021. With this service, Amazon recorded USD 25.21 billion in annual revenue from retail subscription fees. The Company doubled its Prime subscriber base from 100 million to over 200 million members since the beginning of 2018.
And now, on July 12, all those members will be offered exclusive bargains. Right now, the stock is hovering at EUR 112.48. The AWS Cloud business has been able to stabilize the tech stock to some extent and is providing further growth. Due to the impact of the COVID-19 related delivery failures in the e-commerce business, the Company could now recover further.
Barsele Minerals - Gold on Sweden's doorstep
While tech giants like Amazon focus on special offers and flush money into the coffers through their Prime subscribers, classic precious metals provide a solid foundation. Sometimes there needs to be a balance between uncertain factors like the production stability of a BASF or fleeting consumers like Prime subscribers. One industry that continues to move forward steadily and without major dislocations is the mining and exploration business. Before precious metals can be mined profitably, companies like Barsele Minerals (ISIN CA0688921083) explore tracts of land with experienced geologists and test them through test drilling.
Approximately 600 km north of Stockholm, Sweden, is an area that the Canadian company is exploring extensively. Sweden is known for its mining business. In addition to gold deposits, the Scandinavian country has numerous mineral resources such as iron, zinc, lead, copper and silver. All these metals are urgently needed for the switch to renewable energy plants. BASF, for example, is directly affected in order to maintain its production. Knowing that with Barsele Minerals, there is a raw material explorer in the direct neighborhood - without dependencies on China, the US or similar candidates, makes some investors breathe a sigh of relief.
The honest communication of BASF's CEO is preparing existing investors for a rather tepid share price performance in the second half of the year. For some, this is the chance to get in now, even though the share price may fall even further. Amazon will make decent sales on July 12 and delight its 200 million Prime subscribers with exclusive e-commerce bargains. This will also influence the share price. Those who prefer to bet on solid developments should take a closer look at Barsele Minerals. Gold is practically on Sweden's doorstep, and solid values are in demand, especially in times of crisis.
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