15. March 2021 | 07:20 CET
Bitcoin Group, Osino Resources, Newmont: Inflation winners for the portfolio
Despite rising inflation and climbing energy prices, the European Central Bank is sticking to its ultra-loose course and will be even more involved in the bond market in the future than it already is. In this way, the monetary guardians want to recapture rising yields and improve companies and governments' refinancing conditions. While this is understandable in view of the crisis, it could be too much of a good thing as early as the second half of 2021. If the economy picks up again after the lockdowns and people enjoy their lives without restrictions for the first time in more than a year, inflation could loom. We present three stocks that many investors believe hold value and explain what is in them.
time to read: 3 minutes by Nico Popp
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Bitcoin Group: Volatile future value
Bitcoin Group's stock has soared in the wake of the crypto hype. The Herford-based Company operates Bitcoin.de, a trading platform that has benefited from the favorable industry environment and posted its third-best monthly result in January in terms of commission revenue. In addition to a trading platform, the Company also offers futurum bank AG and can thus dovetail innovative crypto solutions with classic financial business. The tokenization of assets is considered a megatrend in the financial industry and, in addition to cost savings, promises the opportunity to make asset classes accessible to new groups of investors.
Companies that are fast in this area can do good business with real estate, art or other tangible assets in addition to cryptocurrencies. What is ultimately digitally securitized doesn't matter. All that matters is that the securitization is fast, efficient and cheap, thanks to blockchain technology. Then it no longer matters whether a wealthy investor invests in a painting or several thousand small investors together.
Bitcoin Group has set itself the goal of building investments with a future around cryptocurrencies and blockchain. In recent years, the Company has been developing steadily. The share has been trading firmer again for a few days but is still more than 20% cheaper than 3 months ago. While the stock is still stuck in a consolidation formation from a chart perspective, investors should keep an eye on the stock. The risk-reward ratio is currently already more favorable than a few weeks ago.
Osino Resources: Renowned project developer with leverage on the gold price
The Canadian Company Osino Resources was one of the biggest beneficiaries of the gold rally that started a little less than a year ago and drove the gold price to an all-time high last summer. Since then, the stock has been consolidating but holding very steady compared to other small resource companies. Osino Resources operates in Namibia in the middle of an emerging gold belt. Namibia is considered a stable democracy and a good place for resource projects, with B2Gold operating in the neighborhood of Osino's Twin Hills project. In recent months, exploration work on Twin Hills has brought to light, among other things, gold discoveries over 241 meters with grades of 0.65g/t. Intersections over 37 meters even yielded grades of 2.58 g/t.
The property is integrated into intact road infrastructure and is considered to be the next emerging gold region. Osino Resources is planning a preliminary feasibility study for the second quarter of 2021. At that time, the market will learn how to proceed with the project. Osino Resources has experienced management that has sold a project to B2Gold before and has illustrious shareholders, such as Rothchild, Earth Resource Investment Group, Mackenzie, Merk and J. Zechner. As an advanced project developer, Osino could benefit disproportionately from rising gold prices. The Company has sufficient capital in its coffers and a clear strategy. In times of rising inflation, the stock could be an attractive instrument to add to the portfolio.
Newmont: Solid but no more
One stock that is mentioned repeatedly as an alternative for investors, also because of its name, is Newmont. The Colorado-based Company makes around 80% of its revenues from gold, with another 20% coming from the sale of copper. Newmont offers an exciting mix - after all, copper is currently in great demand and benefits from the increasing demand for future technology such as electric cars or regenerative energies. In the last 3 months, however, the value hardly made any headway. The producer suffered from the falling gold prices - even the copper business did not help.
As a large producer, stocks like Newmont will benefit from rising commodity prices and shed their market weakness as soon as commodity futures prices start to rise again and the focus is more on inflation. However, the trees will not grow to the sky with such large companies. If you want to achieve significant effects for your portfolio even with smaller amounts, you should take a closer look at smaller stocks, such as Osino Resources. These usually offer far greater leverage to commodity prices and are thus an effective inflation hedge.