04. November 2021 | 10:33 CET
BMW, Triumph Gold, Klöckner & Co - It is getting more and more expensive
The inflation rate in the eurozone recently rose to 3.4%, the highest level since 2008. Everything is getting more expensive, but the situation is manageable for ECB President Christine Lagarde. Driven by special factors such as the high price of oil and gas and production bottlenecks, prices are skyrocketing. However, an interest rate hike to curb inflation is not on the agenda before 2023, she said. Meanwhile, many listed companies are delivering record figures, benefiting from commodity price increases.
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ISIN: TRIUMPH GOLD CORP. | CA8968121043 , KLOECKNER + CO SE NA O.N. | DE000KC01000 , BAY.MOTOREN WERKE VZO | DE0005190037
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Klöckner & Co - High dividend payout
After two years without a dividend, steel and metal trader Klöckner & Co. came around the corner with a dividend announcement of between EUR 0.90 and EUR 1.10, surprising the analyst community, who on average had expected a payout of EUR 0.66 per share certificate. Once again, the positive momentum of steel prices in the third quarter resulted in record earnings, the best operating profit since the IPO, and led to a sales growth of 59.3% to EUR 2.00 billion. The improving market environment pulverized EBITDA before major nonrecurring items from EUR 40.00 million after nine months of 2020 to EUR 277.00 million.
Apart from the favorable market environment, the positive effects of the restructuring measures from the Surtsey project were also among the reasons for the excellent result. For the full year 2021, the management team of Klöckner & Co. continues to expect EBITDA before major nonrecurring effects of around EUR 800 million. Following the figures, investment bank Warburg Research left its rating for Klöckner & Co at "buy" with a price target of EUR 15.50.
Triumph Gold - Best conditions
From a historical perspective, the general conditions that currently prevail are actually an advantage for an investment in gold - historically low-interest rates, unlimited bond-buying programs and central banks whose hands are tied due to the high national debts to significantly tighten the ultra-loose monetary policy. Nevertheless, the precious metal is still in correction mode. However, the long-term picture with gold as an inflation hedge continues to look positive, at the latest when the monetary guardians have to admit that the price increase will not only remain temporary but permanently at a high level. Therefore, an anticyclical build-up of positions in gold mine producers or exploration companies is a good idea at the moment.
Since last year's high, the Triumph Gold share has undergone a correction of over 60%. In the process, the Canadians are making good progress at their wholly-owned Freegold-Mountain core project in the mining-friendly Yukon. The property is equipped with world-class infrastructure and hosts three National Instrument 43-101 compliant mineral deposits, Nucleus, Revenue and Tinta Hill. In addition, the exploration company owns 100% of the Big Creek and Tad/Toro copper-gold properties near the Freegold Mountain project.
Back in September, Triumph Gold completed a ten-hole drill program totaling 6,615m of drilling. Results should be expected during November. A fully funded drill program totaling 8,000m is planned for the full year. The drilling will be carried out using the latest artificial intelligence technology. In doing so, the system identified as yet undetermined limits of mineralization and improved the technical understanding of the Nucleus and Revenue deposits.
The Company currently has a market capitalization of approximately EUR 21.5 million. In the past, exploration companies have outperformed the market with successful drilling results and a long-term increase in the gold price.
BMW - Forecasts exceeded
Car manufacturer BMW also posted strong figures, surprising investors and analysts alike despite the global semiconductor crisis. It posted a record profit of EUR 2.58 billion, up 42% on the same period last year. Although the Munich-based Company sold "only" 593,177 cars, almost 12% fewer than in July-September 2020, the semiconductors were installed in more expensive, more profitable models. Because of the lower supply, BMW had to give customers fewer discounts.
"We are on target for our full-year guidance and look ahead with confidence," Nicolas Peter said. "We expect semiconductor supply to keep us busy beyond 2021." For 2021 as a whole, BMW plans to achieve an EBIT margin in the automotive segment of 9.5% to 10.5% and "solid growth" in deliveries. Meanwhile, US analyst firm Bernstein Research spoke up and reiterated its "Outperform" rating with a price target of EUR 120.
Inflation is hitting end consumers and putting a strain on their wallets. Companies such as steel trader Klöckner & Co, on the other hand, are benefiting from rising prices. Sales of high-priced models also enabled BMW to report record results. Meanwhile, Triumph Gold is waiting for positive drilling results.