Chronically Undervalued: When Will the Knot Finally Break for Mountain Alliance, Lahontan Gold and Mercedes-Benz?

Mountain Alliance: When the Share Price Refuses to Follow Net Asset Value

A striking discrepancy exists at the Munich-based holding company Mountain Alliance. The net asset value (NAV) per share stands at EUR 5.33, while the stock trades at EUR 2.66. Even after applying a 15% valuation discount, which is standard for private equity holding companies, the NAV remains at EUR 4.53—about 70% above the market price. The business model was originally based on investments in digital startups. Of the 16 portfolio companies, the language-learning platform Lingoda is by far the largest position, accounting for about 50% of the NAV.

However, the focus has been shifting noticeably toward the defence sector over the past two years. One of the most important holdings is Destinus, a Dutch specialist in AI-driven drones and interception systems that operates a joint venture with Rheinmetall. Destinus is currently valued at approximately EUR 400 million; however, according to estimates by the investment bank Rothschild & Co, a value of EUR 5 billion could be realized in the event of an IPO. Other investments in the defence sector include Evolved Aerospace, a British developer of autonomous helicopters that can be equipped with drones, as well as MindGuard, an AI-powered platform developed in Switzerland to support the mental resilience of emergency responders, which is already being used in Ukraine to help cope with war-related trauma.

As Mountain Alliance founder Daniel Wild explained over the weekend during a presentation in Heidelberg, investments typically remain in the portfolio for 4 to 6 years, after which an exit is sought—either through a sale or an initial public offering (IPO). For this year, Wild has indicated the potential sale of the long-standing investment Shirtinator. The Munich-based company prints custom designs on clothing and accessories and is now expected to provide capital for further expansion of its defence portfolio. Analysts at Montega recently reaffirmed their "Buy" recommendation for Mountain Alliance with a price target of EUR 4.50. As a holding company, the investment firm generates virtually no operating revenue; therefore, traditional profit metrics do not apply—what matters is the net asset value (NAV), which is currently double the current share price.

Lahontan Gold: When the Gold Is Literally Lying in the Street

The discrepancy is even more pronounced in the case of Lahontan Gold. At the Santa Fe Project in Nevada, the Canadian company is developing a former mine where around 359,000 ounces of gold and 702,000 ounces of silver were mined between 1988 and 1995. Electricity, water, road access, and a workforce are all in place—a significant time and cost advantage over a greenfield project. The resource estimate updated in August shows 1.195 million ounces of gold equivalent in the "Indicated" category, as well as an additional 1.19 million ounces in the "Inferred" category, totaling nearly 2.39 million ounces—a 22% increase over the initial estimate.

Even more remarkable: an estimated 200,000 ounces of gold lie on the mine's old heap leach pads, accessible at surface at a comparatively low cost. At the current gold price of around USD 4,300 per ounce, this corresponds to a market value of USD 860 million—a multiple of Lahontan Gold's market capitalization, which currently stands at around USD 120 million with a share price of CAD 0.37 (EUR 0.23). This figure does not even include the total gold reserves—which, according to an older Preliminary Economic Assessment (PEA), were valued at approximately USD 200 million for the main mine alone based on a gold price of USD 2,705 per ounce assumed at the time—let alone the satellite projects in the surrounding area. CEO Kimberly Ann reveals more details in an interview with IIF host Lyndsay Malchuk:

https://youtu.be/QGRV7IfTWec

Lahontan's operational progress demonstrates that the company is no longer just a pure-play explorer. A geotechnical drilling program covering 2,569 m not only served to expand the resource but also provided data on hydrogeology and rock characterization—foundational work for the mine's permitting process. In the coming weeks, the updated PEA is also expected, which will, for the first time, take into account the expanded resource, the changed gold prices, and additional sulfide material—the previous report from 2024 was based on a different gold price environment.

Financially, the company is secured well into 2027; CEO Ann is currently negotiating with banks to finance construction costs. These negotiations appear to be successful, as Lahontan Gold is already bolstering its workforce in preparation for the production phase: geologist Tony Gesualdo (previously employed by Barrick Mining, Coeur Mining, and McEwen, among others) is returning; Michael Kubel brings over 10 years of experience in Nevada open-pit mining and heap leaching; and with Jen Earle as well as CFO Billy Choi (formerly at Lithium Royalty), who will start in October, the capital markets side is also being strengthened. The roadmap is set. Approval and start of construction in 2027, and the first in-house cast gold bars by early 2028 at the latest. That is when the value, which is not yet reflected in the share price, is likely to rise.

Mercedes-Benz: When Headwinds Lead to Favourable Key Ratios

Mercedes-Benz, too, has been considered chronically undervalued for years. But the situation here is different. The automaker is not weighed down by a holding company discount or a yet-to-be-tapped gold mine. Rather, a confluence of economic and political headwinds is resulting in key metrics that seem inappropriate for a manufacturer of premium products. With an expected P/E ratio of 6.9 for 2027 and a dividend yield of 6.7%, the stock is among the most attractively priced on the DAX. The main cause of skepticism is the sluggish business in China. In the second quarter, sales there plummeted by 30%; globally, the group's sales fell by 6% to 511,900 vehicles. Still, outside China, sales rose by 3%, and electric-vehicle sales grew by 51% worldwide—and by as much as 87% in Europe. One in eight vehicles sold is now fully electric. The overall Chinese market is structurally weakening due to a combination of reduced purchase incentives, high fuel prices, and consumer sentiment weighed down by the real estate crisis. Domestic manufacturers are also moving faster and offering lower prices when it comes to electric powertrains, while Mercedes remains even more heavily represented there with internal combustion engines.

Added to this are problems in the US. Since the Trump administration's announcement in May of this year that it would impose 25% import tariffs on European vehicles, uncertainty has continued to grow. In response, the management team led by CEO Ola Källenius has approved a USD 7 billion investment package in the US, including USD 4 billion by 2030 for the Tuscaloosa plant in Alabama, where GLC production is also being relocated. Running in parallel is the cost-cutting program "Next Level Performance". The goal is to reduce costs by EUR 5 billion by 2027: 5,500 employees have already accepted severance offers; production of the A-Class has moved from Rastatt to Kecskemét, Hungary. Such restructuring costs are weighing on margins in the short term but are expected to lower the cost base in the medium term.

In 2025, earnings plummeted by nearly half to EUR 5.35 per share; analysts expect earnings to remain similarly low this year. Starting in 2027, however, the outlook is expected to return to growth. Consensus estimates stand at EUR 6.77 per share for 2027 and EUR 7.73 for 2028. The dividend is also likely to continue rising, offering some compensation for the wait until China stabilizes and the US strategy takes effect. The average analyst price target is EUR 59.60, a solid 28% above the current share price of EUR 46.60. Fair value estimates range from EUR 50 (UBS) to EUR 73 (Deutsche Bank).

Conclusion: Three Forms of Undervaluation, Three Potential Catalysts

These three cases illustrate just how differently "undervaluation" can manifest: a net asset value-to-price gap in a holding company undergoing restructuring; physical gold, the production of which the market apparently does not yet credit a relatively young mining company with being capable of; and an established conglomerate whose valuation is suffering under real pressures from China and the US. What all three have in common is that concrete events are on the horizon in the coming months that could close the respective gaps: exits at Mountain Alliance, the revised PEA and progress on permits at Lahontan Gold, and operational improvements at Mercedes-Benz.

The risk profile for investors varies accordingly. The established German automaker consoles investors with high dividends during lean times, though its upside potential appears limited. By contrast, the Canadian mining stock Lahontan offers the chance for a tenfold return once the next milestones are reached. However, it will still be several years before a dividend is paid. At Mountain Alliance, special distributions are conceivable at any time in the event of major sales or initial public offerings; however, it remains to be seen whether the new strategy of increasing its involvement in the defence sector can break the deadlock.