Close menu




June 29th, 2022 | 10:06 CEST

BASF, Globex Mining, Barrick Gold - Stock pickers, beware!

  • Gold
  • Commodities
  • chemicals
Photo credits: pixabay.com

Price increases, inflation, rising interest rates and geopolitical risks - As an investor, one can get nervous. Despite all the challenges and uncertainties, depressed stock price levels offer an inviting risk-reward ratio. The big picture continues to favour commodity investments. Potential is not only to be found in the top dogs. Looking at the second tier is often more rewarding than one might think.

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: BASF SE NA O.N. | DE000BASF111 , GLOBEX MINING ENTPRS INC. | CA3799005093 , BARRICK GOLD CORP. | CA0679011084

Table of contents:


    BASF - Expectation management

    Shares in the Ludwigshafen-based Company have fallen by around a third in the last 12 months. The business environment is becoming increasingly difficult. Company director Dr Martin Brudermüller does not mince his words and points out the serious dangers. By formulating conservative targets, the CEO also lowered the bar for market expectations. Warburg analysts see the potential for positive surprises for companies like BASF that are cautious about the future.

    The broad-based chemical group recently announced that it intends to invest more in the circular economy at its Schwarzheide site in Lusatia concerning battery materials production and recycling. At the beginning of 2024, it plans to start a plant for recycling black mass from batteries. Black mass contains large amounts of lithium, nickel, cobalt and manganese and is obtained by mechanically treating batteries at the beginning of the recycling process.

    "The closed-loop from spent batteries to cathode materials for new batteries supports our customers along the entire battery value chain, reduces dependence on mined raw materials and enables a circular economy," elaborated Peter Schuhmacher, head of BASF's Catalysts division.

    Globex Mining - Anticyclical and broadly positioned for success

    The Canadian Company Globex Mining owns a large diversified North American portfolio of mid-tier exploration, development and license properties at over 200 projects. In doing so, Globex acts anticyclically, buying when commodity prices or companies are down. When markets start to heat up, the Canadians are on the sell side, turning the projects over for cash, shares or a license fee.

    The Company, led by CEO Jack Stoch, has followed the strategy successfully for nearly 40 years. As a result, the Canadians have been able to build up a significant cash balance. The key to success is that Globex explores on its own account, investing at least CAD 1.5 million each year.

    Most recently, Globex reported results from the Phase 1 drill program totaling 4,462 meters from Maple Gold Mines. The program was undertaken to test potential extensions of mineralization along the formerly producing Eagle-Telbel trend. As a result, additional zones of gold mineralization were discovered. Globex holds an option to acquire the property.

    With Globex, investors participate in a broad portfolio of high-opportunity projects in the categories of precious metals (gold, silver, platinum, palladium), base metals (copper, zinc, lead, nickel) and critical commodities. With a market capitalization of only about CAD 60 million, the stock market has so far inadequately priced in the Company's potential.

    Barrick Gold - Surprise potential

    When will the breakthrough come? In view of geopolitical risks and sharply rising inflation, new highs in precious metal prices seem to be on the cards for the longer term. The price of the precious yellow metal above USD 1,800 is historically high. Rising energy costs could nevertheless somewhat cloud the track record of the world's second-largest gold producer.

    In the current fiscal year, the Canadians plan to produce between 4.2 to 4.6 million ounces of gold and 420 to 470 million pounds of copper. Related expenses will range from USD 1.9 billion to USD 2.2 billion. According to company statements, production costs (AISC) will rise to between USD 1,040 to USD 1,120 per ounce of gold and USD 2.70 to USD 3.00 per pound of copper. However, since the Group only calculates with a gold price of USD 1,700 and a copper price of USD 4.00, there could soon be positive surprises. Most analysts take a similar view, believing that the stock has an upside potential of almost 50% in the next 12 months.


    Opportunities also present themselves in stormy times. The analyst community believes that top dogs BASF and Barrick will catch up in the coming months. With a market capitalization of around CAD 60 million, Globex Mining is certainly under the radar of most investors. But it is this fact, the proven track record, a high cash balance and an extensive portfolio that make the stock worth a closer look.


    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.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

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

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by Juliane Zielonka on February 22nd, 2024 | 07:00 CET

    Royal Helium, Fresenius, BASF: Chemical and Healthcare industry - Where is the next investment opportunity?

    • Helium
    • Healthcare
    • chemicals

    Europe is in the midst of an industrial upheaval due to the Green Deal, which presents both challenges and opportunities for investors. While companies like BASF are arguing for deregulation and increased subsidies to support the green transition, healthcare company Fresenius is undergoing a period of radical change and realignment. The medical technology market is booming. The global MedTech market size amounted to USD 574,002.45 million in 2022 and is expected to increase to USD 814,159.2 million by 2028, with an annual growth rate of 6.0%. Critical raw materials such as helium are in particularly high demand. Royal Helium is one of the producers of this valuable gas and impresses with a well thought-out and sustainable business model. Where does the next investment opportunity lie?

    Read

    Commented by Armin Schulz on February 21st, 2024 | 07:30 CET

    Barrick Gold, Desert Gold, Renk - Golden times everywhere?

    • Mining
    • Gold
    • Defense

    The world is full of economic uncertainty and geopolitical tensions. These are ideal conditions for gold, which is still considered a safe haven. There are now several factors that point to a sustained upswing in gold prices. One factor is the increased involvement of central banks, which are increasing their reserves to an extent not seen for decades. Another factor is the discussion within the BRICS nations about introducing a new currency backed by gold as a counterweight to the dominant US dollar. Therefore, today, we look at two gold companies and shed light on Renk, a representative of the defense industry, which is also experiencing golden times.

    Read

    Commented by Fabian Lorenz on February 21st, 2024 | 07:00 CET

    Top news: BYD, Bayer and Globex Mining

    • Mining
    • Gold
    • Commodities
    • Electromobility
    • chemicals

    Bayer shocked investors yesterday with the announcement of its dividend cut, which shouldn't have been much of a surprise. The Company is burdened with high debt, endless legal fines, and an empty pharmaceutical pipeline. In an initial reaction, analysts have lowered the share price target. BYD, on the other hand, is doing well operationally. Only the share price is not picking up. Will a share buyback turn the share price around? For those who want to profit from the commodity boom with reduced risk, then Globex Mining's stock is attractive. The news flow is strong, and those who act quickly can still register and follow the live presentation of the mining incubator at the 10th International Investment Forum, IIF, today.

    Read