December 28th, 2020 | 09:45 CET
BASF, Lufthansa, Triumph Gold - Watch out for the end of the year!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BASF SE - Making money in the cycle
BASF shares are back at a 1-year high. After two profit warnings and much speculation about a cracked economic trend, the share price has swung back up to just under EUR 65.00, from lows below EUR 40.00.
BASF is starting an ambitious circular economy program that aims to avoid waste, reuse products and recover resources. "Companies that can offer solutions for the transformation to a circular economy will have a decisive competitive advantage," says Dr Martin Brudermüller, CEO and Chief Technology Officer of BASF, on the circular economy, a vital issue for the future in society and politics.
BASF has therefore launched a new Circular Economy Program. By 2030, the Company aims to double its circular economy solutions to EUR 17 billion. Starting in 2025, BASF plans to process 250,000 metric tons of recycled and waste-based raw materials annually, replacing fossil raw materials. The CEO and scientist presented examples from BASF's research pipeline at the first digital research press conference. Here, one is certainly on a promising path for the future.
BASF SE has a current market value of EUR 59.4 billion. The chart is chasing impressively upwards right now and still with a dividend yield of a proud 6.5%.
Lufthansa - flying loops doesn't help either
There are hardly any more troubled industries than airlines, travel companies or cruise operators. No sooner did air traffic start to move gently upwards again and then the second Covid-19 wave hit and all upward hopes were dashed once again. Parts of the Christmas business could still be saved with the Christmas tree renegades, but there is already the threat of another bitter decline at the beginning of the year. Germany's flagship airline secured an EUR 8.13 billion stabilization package from the government in March to make up for shortfalls from the pandemic which has brought demand for travel worldwide to a near standstill.
In a statement in November, Lufthansa CEO Carsten Spohr had warned that the airline could be forced to cut 1,000 pilot jobs in the second quarter if it failed to reach a wage agreement with unions. Under the agreement reached Wednesday, the Berlin-based Company will reduce working hours next year under the government-sponsored short-time work program. However, short-time work does not create long-term tariff reductions, and the Company will not be back in the black until 2023 at the earliest, even after mass vaccination.
Market capitalization is now only EUR 5.9 billion, and servicing liabilities and financing the more than 700 aircraft it owns is becoming a monster task. At the end of 2019, the book value per share was still EUR 21, with government dilution currently around EUR 14. Going against the trend therefore probably only makes sense with a view to 3 years. The looping flight continues!
Triumph Gold - On the Leap
Triumph Gold Corp, formerly known as Northern Freegold Resources Ltd, is a Canadian-based junior resource Company engaged in the exploration of valuable mineral properties in the Yukon Territory and Arizona. Its notable projects include Freegold Mountain, the Tinta Hill, Goldstar, Golden Revenue, Tad/Toro, Nit and Severance zones, and the Burro Creek project in Arizona. With CAD 6 million in cash, the drilling projects are secured well into 2021.
The Freegold Mountain project within the Dawson Range, located over 70 kilometers northwest of Carmacks in the Whitehorse Mining District, appears particularly prospective. Mining history here goes back to 1900. At that time, a large amount of copper and gold was already being mined, so one may assume that even the tailings can still be managed extremely profitably with today's exploitation methods. Burro Creek is located near State Highway 93 in Mohave County, Arizona. There, too, lies a historic mining district that promises much potential using today's technologies and high market prices.
The speculative stock has a current capitalization of CAD 30.2 million at a price of CAD 0.21 per share. Considering that the price was still at CAD 0.48 at the end of July, one should take advantage of the current "tax loss season" to enter. The Newmont Corporation, itself the largest gold miner globally, is already adequately engaged with over 10%.
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