Close menu




June 3rd, 2022 | 10:49 CEST

Bayer, Globex Mining, RWE - Diversified shares perform strongly in tough times

  • Commodities
  • Diversification
Photo credits: pixabay.com

Going all-in is extremely risky on the stock market. Because in the long run, you are not always right with your estimates, so a poor trade can quickly tear down the good performance. For example, a better approach would be to diversify the portfolio, spreading the investment over 10 different companies. Two big winners are enough to more than absorb several total losses. Those who want even more security can add stocks to their portfolio that are already diversified. Today we will take a closer look at three companies of this kind.

time to read: 4 minutes | Author: Armin Schulz
ISIN: BAYER AG NA O.N. | DE000BAY0017 , GLOBEX MINING ENTPRS INC. | CA3799005093 , RWE AG INH O.N. | DE0007037129

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview

     

    Bayer - Strong first quarter

    Bayer's product portfolio consists of three divisions. The Pharmaceuticals division consists primarily of prescription drugs, and non-prescription drugs are assigned to the Consumer Health division. Crop Science is the third pillar, focusing on high-quality seeds and innovative crop protection solutions. The last area, in particular, weighed heavily on the Group due to the lawsuits concerning glyphosate. Despite the major crisis caused by the Monsanto takeover, the share price did not collapse because the Pharmaceuticals division could absorb at least some of the problems.

    Now that fertilizers are in great demand again, this division is also contributing significantly more to Group sales. This was clearly reflected in the first quarterly figures on May 10. Crop Science increased its earnings by 50% and achieved an EBITDA of around EUR 3.7 billion. Overall, sales rose by 14.3% to EUR 14.6 billion, and EBITDA was EUR 5.3 billion, an increase of 27.5%. The figures show that the recently much-maligned agricultural sector has significantly improved. It was recently announced that the Group intends to substantially increase its sales in India for the public health sector. The goal is to supply 1 million pharmacies in India. At the moment, the Company has a good 0.5 million stores.

    Bayer's share price has risen this year, and not just since the good quarterly figures. Since the beginning of the year, the stock has been in demand. It was able to gain over 42% to EUR 67.99 at its peak. The current price is EUR 66.09 per share. Since the quarterly figures, there have been nine buy recommendations with price targets between EUR 70 and EUR 90. Only Credit Suisse recommends holding with a target price of EUR 62. Following the share price increase, the dividend yield is now just over 3%. The good earnings from the agricultural division make the worries about the lawsuits seem smaller at the moment.

    Globex Mining - Diversified and sophisticated business model

    Since many commodity prices exploded last year, one hears more and more often that commodities are at the beginning of a new supercycle. For the investor, the question is: what is the best thing to invest in? Lithium, gold, uranium, copper, rare earths or rather diamonds? With an investment in Globex Mining, one covers all these areas and many more. The Company has acquired 210 projects at low cost in areas with low political risk over the past decades. Subsequently, the projects are explored and upgraded. After upgrading, the projects are of interest to other companies, which then take over Globex's projects and pay company shares, cash and royalties in return.

    Experienced CEO Jack Stoch has thus created a kind of perpetual motion machine. This cycle is so sophisticated that the Company is debt-free, can make acquisitions from its current cash balance of around 20 million Canadian dollars (CAD) and has thus long since ceased to rely on capital increases, which ultimately benefits its shareholders. Currently, the Company receives royalty income from 90 projects and has optioned 7 more. In these options, Globex also receives cash payments or shares. The Company that has received the option must put a predetermined amount into the exploration of the project within a specific time. If this does not happen, the option expires and all rights revert to Globex.

    The Company has a unique diversification. On the one hand, it has 210 projects, and on the other, a wide variety of raw materials. The projects are also geographically distributed, namely in Canada, the USA and Germany. At its peak this year, Globex Mining's stock gained over 68% to CAD 1.69. Rising interest rates, Zero-COVID in China and fears of recession pushed the stock down to the current CAD 1.17. If China opens, the nation with the greatest hunger for raw materials will be back on the market, and demand will rise accordingly. That should also lead to an increase in commodity prices, from which Globex should benefit.

    RWE - Entering the hydrogen business

    RWE remains one of Germany's largest energy suppliers. The Essen-based Group generates and supplies electricity from renewable and conventional sources, primarily in Europe and the United States. The Company operates in five segments: Offshore Wind, Onshore Wind/Solar, Gas, Supply and Trading, and Coal and Nuclear. The Company serves commercial, industrial and business customers. Following the decision to phase out nuclear power, the Group positioned itself more broadly. Renewable energies are becoming increasingly important, including for the production of green hydrogen.

    On June 2, the Essen-based company announced the purchase of a Dutch gas-fired power plant from Vattenfall for EUR 500 million. The gas plant is located in the immediate vicinity of RWE's power plant in Eemshaven and has a capacity of 1.4 gigawatts. Since the new power plant is already hydrogen-capable, RWE plans to turn the site into an energy and hydrogen hub. It also plans to acquire the Hollandse Kust West offshore wind farm, which has 600 megawatts of electrolyzer capacity. Neither of these acquisitions is yet in the bag, but they would be an ideal fit for the Essen-based company's 'Growing Green' strategy.

    The Group is therefore well-positioned for the post-nuclear era. It has long-term experience in all relevant future technologies and is well-positioned, especially in industrialized countries with high growth potential. Investors are rewarding this, and the share has been on a clear upward trend since July last year. Even the Ukraine crisis was able to stop this only briefly. The share is currently trading at EUR 40.90. That means that the former dividend star is only paying a 2% dividend. Since May, all analysts have regarded the share as a buy with price targets of up to EUR 60.


    Diversification is good and helps both the portfolio and the shares if they cover different business areas. In Bayer's case, the pharmaceutical and agricultural sectors support each other even in difficult times. Globex Mining has almost all commodities in its project portfolio and appears undervalued simply because of the number of projects and proven reserves. RWE had to adapt to the changes of necessity. The Essen-based Group has succeeded impressively in doing so.


    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by André Will-Laudien on October 22nd, 2025 | 07:35 CEST

    Gold and silver – New record highs! Keep an eye on Barrick, Agnico Eagle, Desert Gold, and First Majestic!

    • Mining
    • Gold
    • Silver
    • Commodities

    Silver prices broke through the USD 53 mark for the first time at the beginning of the week, and gold is attempting to reach the USD 4,300 mark. Precious metal enthusiasts have been anticipating these moves for a long time, but traders on the futures exchanges clearly have not. In addition to extreme physical scarcity, the exploding prices are also attributed to heavy short squeezes. The physical silver market is under tremendous pressure as the availability of real metal to hedge the numerous futures transactions is severely limited. This imbalance is causing erratic market reactions and driving the spot price into an almost exponential sell-off. The current rally in precious metals is driven by geopolitical uncertainty, industrial demand factors, and the search for safe investments. In times of excessive government debt, the weakness of the US dollar is now also weighing on the market. Which companies should investors keep a close eye on now?

    Read

    Commented by Fabian Lorenz on October 22nd, 2025 | 07:30 CEST

    SHARE PRICE EXPLOSION for commodity gems!? Nordex, Aurubis, Salzgitter, and Power Metallic Mines!

    • Mining
    • Lithium
    • Copper
    • Commodities
    • Steel
    • Wind
    • renewableenergies

    Shares in the commodities and precious metals sector have been unstoppable in recent weeks. Power Metallic Mines could soon become an explosive latecomer to the rally. There are good reasons for this, as the CEO recently made clear. At Aurubis, the rally appears to be over for now. Analysts are skeptical, and the major shareholder is cashing in his shares - albeit in an unusual way. So should you sell now, too? The past few months have been unusually positive for Nordex. There is currently no sign of a slump in the wind business. What are analysts saying after the latest order intake?

    Read

    Commented by Armin Schulz on October 21st, 2025 | 07:15 CEST

    Barrick Mining and Kobo Resources: Gold as security – Occidental Petroleum: Energy as opportunity

    • Mining
    • Gold
    • Commodities
    • Oil
    • Gas
    • Energy

    In an era of geopolitical upheaval and monetary policy experimentation, tangible assets are gaining strategic importance. Gold remains a fundamental store of value, while the transformation of the energy sector is driving demand for critical raw materials. Even oil, despite volatile prices, retains its status as a geopolitical lever. In this environment, companies with access to these resources are well-positioned. Three players are in focus: the gold producer Barrick Mining, the exploration specialist Kobo Resources, and the oil and gas company Occidental Petroleum.

    Read