Buying Opportunities? TKMS, Almonty and Vonovia: Should Investors Add These Stocks to Their Portfolios?

Almonty: Milestone Expected Next Week

Almonty Industries is one of the success stories in the commodities sector in recent years. The company has brought the Sangdong mine in South Korea into production and is now contributing to the supply of tungsten, a critical raw material for Western industry. The share price has also performed impressively in recent years, with the upward trend repeatedly interrupted by sharp pullbacks. This is also the case at present. Such phases have repeatedly proven to be buying opportunities. If you followed the conversation with Almonty's CEO at the International Investment Forum (IIF), this could very well be the case again right now. The CEO and major shareholder is still going full steam ahead and expects to reach a historic milestone next week.

As CEO Lewis Black explained, Sangdong's ramp-up phase is underway. The crushing plant has already been successfully commissioned, and the company is currently focusing on optimising the desired quality. According to Black, recovery rates are within the expected range. The plant is currently operating for around 16 hours a day, with these hours being increased gradually. The first ship to transport the concentrate is booked for October 24. A historic milestone. After that, a ship is expected to bring Almonty's tungsten concentrate to customers every month.

Progress is also being made on the further expansion of Sangdong. Work on the second phase has begun. With this, Almonty intends to double production capacity. The additional mills required are due to be delivered within the next four to six weeks. In addition, Almonty plans to build its own tungsten oxide plant in South Korea to extend its own value chain. A suitable site has already been identified. Exploration of the Sangdong molybdenum deposits is also underway. The company is preparing an updated resource estimate.

Black also reported progress on the other international activities. The Portuguese Panasqueira mine posted a margin of over 63% last quarter. In Rwanda, Almonty has already started buying tungsten and, in the CEO's assessment, could become the country's largest tungsten exporter as early as November. In Spain, the Los Santos project is intended to show whether tungsten can be recovered economically from historical mining waste. If successful, this process could also be used at other European sites. Permitting procedures are underway for the US project in Montana. Black remains positive about the overall tungsten market. The Almonty CEO has seen no weakening in demand so far due to the high price level. Instead, limited tungsten availability remains the industry's central problem.

TKMS: Share Price Performance Not Justified

Since its stock market flotation in October last year, TKMS shares have traded sideways. In mwb research's view, this is not justified. Analysts see the fair value at EUR 140, while shares currently trade at EUR 79. TKMS's operational outlook has improved significantly thanks to several major projects. These include preferred bidder status in Canada with a volume of over EUR 15 billion, a potential submarine order from India worth EUR 3.5 billion and two additional Norwegian submarines worth EUR 3.9 billion. Added to this are two guidance upgrades and the positive performance of subsidiary Atlas Elektronik. In mwb research's assessment, the order backlog secures the business outlook through 2035. Nevertheless, TKMS trades at an 8x multiple based on 2027 EBITDA estimates. Comparable companies trade at 11. The shares are therefore a Buy.

Most recently, TKMS secured another order worth billions. The Bundestag's Budget Committee has approved the construction of four additional MEKO A 200 DEU frigates. This expands the programme to eight ships, valued at EUR 11.6 billion. It is the largest order for surface vessels in TKMS's history. As the additional frigates build on existing production structures and supply chains, mwb research expects positive effects on planning certainty and margins.

For the coming years, mwb research expects significant revenue and earnings growth at TKMS. However, new orders will drive growth only in the medium term. Revenue is expected to rise from EUR 2.42 billion in 2026 to EUR 2.69 billion in 2027 and EUR 3.15 billion in 2028. For EBITDA, analysts forecast an increase from EUR 255 million to EUR 303 million, then to EUR 385 million. Net income is expected to rise over the same period from EUR 131 million to EUR 154 million, then to EUR 189 million. This would increase earnings per share to EUR 1.19.

Vonovia Shares Fall to 2023 Levels

Property owners were long considered comparatively crisis-resistant investments. After all, people need somewhere to live and have to pay their rent even in economically challenging times. Yet Vonovia's shares show that this business model offers little security on the stock market. So far this year, shares in Germany's largest residential property group have lost around 30% of their value. They are trading below EUR 17, their lowest level since the property crisis in 2023. The all-time high of over EUR 50 dates back to 2021.

Vonovia is currently caught between interest rate fears and expropriation uncertainty. Rising capital market interest rates are weighing on property valuations and making financing more expensive. Added to this is the political uncertainty in Berlin. Following the Left Party's election victory, the debate over the possible socialisation of large housing portfolios has flared up again. With around 138,000 homes in the capital, Vonovia would be particularly affected. Although expropriation faces significant legal hurdles, the discussion alone is causing uncertainty among investors.

Recent reports in "Handelsblatt" illustrate how strained relations between Vonovia and the Left Party have become. According to these reports, a meeting scheduled for this week between Vonovia CEO Luka Mucic and Left Party chairman Luigi Pantisano fell through at short notice. The Left Party accused the property group of preventing an independent journalist from participating as agreed. Vonovia rejects this account, saying it never agreed to a journalist attending. The company also rejects the Left Party's allegations of supposedly systematic violations of tenants' rights. Meanwhile, in an interview with "Handelsblatt", Mucic hinted at consequences for investment plans in Berlin. The roughly 1,000 homes already under construction are to be completed. However, Vonovia is holding back on new projects. He said Berlin now accounted for a smaller share of the future project pipeline. Mucic is calling for a clear political framework before making further investment decisions.

Conclusion

Almonty's operations continue to run smoothly. If the tungsten price remains high, the company should generate strong revenues and exceptional margins in the coming months. Numerous analysts have price targets above USD 20. TKMS's order volume is impressive. However, profits will also have to rise sharply in the coming years. After all, the company is currently no bargain based on mwb's earnings estimate for 2028. Vonovia is likely only for real gamblers at present.