23. November 2021 | 11:19 CET
Bayer, Ayurcann Holdings, Valneva: Three shares, three decisions
The pandemic is dominating the headlines again. For months, investors and the economy believed that lockdowns would never happen again - after all, we had the vaccine. But now Saxony and Bavaria are back on lockdown course. The laws of mathematics suggest that soon other German states will also have to tighten the reins - with all the negative consequences. Shares in the healthcare sector receive special attention in such market phases. We present three representatives.
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ISIN: BAYER , AYURCANN HOLDINGS CORP | CA05476A1012 , VALNEVA SE EO -_15 | FR0004056851
Bayer: More than just aspirin
Strictly speaking, Bayer, based in the Rhineland, is much more than just a pharmaceutical company. Because of its business with seeds and other products, Bayer sees itself as a chemicals group. Nevertheless, the pharmaceuticals business accounts for more than 40% of sales, and together with the "Health" segment, the share of sales even exceeds 50%. The market has also been focusing strongly on seeds in recent months. Here, Bayer is scoring points with a new corn variety that is even less susceptible to weather events than previous plants. Bayer could gain advantages with the new corn variety, particularly against the backdrop of climate change and the associated more frequent weather events.
However, the agricultural sector cannot be viewed in an unqualifiedly positive light. There are still legal disputes over the weedkiller glyphosate, which is accused of being carcinogenic. The provisions made for this are high and distort Bayer's figures. Nevertheless, experts believe that the acquisition of Monsanto will pay off in the long term and consider Bayer to be an innovative company. In the field of medicines, Bayer focuses primarily on cell and genetic engineering and has a stake in the Swiss company CRISPR Therapeutics, among others. Doctors expect a lot from these technologies - investors can also be curious about what Bayer will achieve in the next few years. Chart technically the share is currently in no man's land and only generated a return of 3.8% last year. That is meager and is likely not to attract new investors in the medium term.
Ayurcann: Cannabis products with clever white label strategy
The past few months have also been a zero-sum game for investors in Ayurcann Holdings. The Company specializes in extracting active ingredients from the cannabis plant and only went public in April in a reverse takeover. Ayurcann Holdings offers up to forty different cannabis products, such as creams, balms, and drops, and offers them as white-label products. The first quarters show strong growth in several areas. Products based on cannabis enjoy growing popularity and are also approved in Germany with the active ingredient CBD. Products based on the active ingredient THC should soon become legal in Germany due to the traffic light coalition agreement on controlled dispensing.
Numerous US states and Canada have demonstrated the potential of liberalizing the cannabis market in recent years. In the meantime, Ayurcann has signed contracts with various companies in the field and supplies them with its products. Since the quality is right and Ayurcann is considered reliable, customer numbers have been growing steadily. Since cannabis products are of interest to different customer groups, each of which requires a different approach, Ayurcann's white-label solution makes perfect sense. In this way, the Company bundles capacities, buys the raw material cheaply and leaves the target group-specific marketing to others. The Company has done well with this in recent months. The analysts at Fundamental Research Group see a fair value of around EUR 0.50 - the share is currently trading at EUR 0.10. However, investors should be aware that such price potential also entails risks. These lie in the high degree of regulation of the cannabis market and the possible competition from other companies.
Valneva: Where is the starting signal?
The biotech company Valneva has downright overwhelming competition. The Company manufactures a classic inactivated vaccine against COVID-19 and is currently awaiting approval. Unlike mRNA, the technology behind it has been tried and tested for 60 to 70 years and is very safe, according to the EU Commission. Vaccination skeptics, in particular, could be persuaded by Valneva's preparation and decide in favor of vaccination despite their skepticism. Although Valneva is a latecomer to COVID-19, the vaccine could play a decisive role in the fight against the pandemic. The rampant Delta variant requires higher vaccination rates and the cooperation of even those who have been against the jab so far. Valneva's share price is currently slowly creeping upwards. From a chart perspective, it looks like the calm before the storm. It remains exciting.
While Valneva has been traded as an opportunity on the market for months, Ayurcann Holdings' shares are on hold at a significantly lower level. Although the Company is much smaller, its fortunes do not depend on just one product. The Bayer share is also currently trading in no man's land in chart terms. However, Ayurcann Holdings offers the greatest leverage for a favorable development due to its low market capitalization. Every order can be the starting signal for a rally - but the reverse is also true for negative news.