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February 9th, 2023 | 19:54 CET

Comeback opportunity or a complete washout? These facts decide: Deutsche Bank, K+S, Tocvan Ventures

  • Mining
  • Gold
  • Investments
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Various sectors have enjoyed a boom in recent months. Commodity companies benefited from rising prices, and banks from higher interest rates. But the trees do not grow to the sky even for stocks favoured by the market. Every trend comes to an end. Where investors can believe in comebacks and where uneasiness could threaten - we take a close look for you!

time to read: 3 minutes | Author: Nico Popp
ISIN: DEUTSCHE BANK AG NA O.N. | DE0005140008 , K+S AG NA O.N. | DE000KSAG888 , TOCVAN VENTURES C | CA88900N1050

Table of contents:

    Jared Scharf, CEO, Desert Gold Ventures Inc.
    "[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.

    Full interview


    Deutsche Bank: This is the predicament

    Deutsche Bank's stock has been in the headlines lately. The latest quarterly figures were less good than expected. Even discussions about a share buyback program could not boost the share again. The reason: Analysts had speculated that the shape of the price of cosmetics could be in danger this year. At the same time, media reports about high derivative holdings around precious metals in the balance sheets of US banks are doing the rounds. Also, the bank supervisors of the European Central Bank warned banks on Tuesday to be careful. The risks in connection with the Ukraine war are not yet off the table. Banks should therefore focus on precautionary measures. So is the banking crisis back?

    Instead of waiting for black swans as an investor, it is better to look at the interest rate environment in connection with banks. Central banks in major currency areas have recently taken smaller interest rate steps. An interest rate pause in the second quarter seems possible, and even interest rate cuts are conceivable again from 2024. Exogenous shocks could trigger interest rate cuts, but a latent risk of recession - provided inflation has been reliably averted by then - could also provide grounds for consistent action by central banks. In either scenario, bank shares could come under pressure: A recession weighs on the lending business, and falling interest rates also shrink the scope for banks. After six successful months, Deutsche Bank shareholders can slowly but surely return to a focus on protecting their profits.

    Tocvan Ventures: Financed gold prospector with cost advantages

    Hedging can also be the focus of the shares of Tocvan Ventures - although the term initially seems inappropriate in connection with the smallcap from Canada. Tocvan Ventures operates two promising gold projects in northern Mexico, Pilar and El Picacho. The region is particularly popular for its low-cost heap leach process. This process allows even smaller deposits to be exploited profitably. In general, the Company, in the person of CEO Brodie Sutherland, emphasizes the good general conditions: "The costs for exploration are also significantly lower. For example, we pay around CAD 50 per meter for drilling. Elsewhere, this amount is significantly higher. The bottom line is that our costs are about 25% lower than in other well-known mining regions," the manager said in an interview last summer.

    At that time, in addition to encouraging drilling results, Tocvan Ventures also made a splash with the entry of investor Sorbie Bornholm. The investment secures the Company's financing until 2024 and allows the Company to focus on its core task of exploration. Sorbie Bornholm is known for its strategic support of projects and has, in the past, gradually increased its involvement in companies. The shares of Tocvan Ventures are a flawless small cap with a market capitalization of only CAD 22.6 million. The charm of two promising gold projects, of which El Picacho is very similar to the nearby San Francisco mine, could make the stock attractive as an addition and for investors in turbulent times.

    K+S: New record prices quesitonable

    Two years ago, the K+S share was also considered exciting - inflation was in the starting blocks and K+S anticipated this development. Today, the share has already experienced a positive development. Although analysts have recently raised their expectations again, the potential appears limited despite good underlying conditions. The business is considered cyclical. Weaknesses in the upcoming quarterly figures could make investors sit up and take notice. As K+S has recently broadened its supply chains, risks in connection with the Ukraine war should be lower today. However, it seems questionable whether the share will reach record prices again.

    Demographics alone support K+S - but is that enough? Source: K+S AG

    The gears are sputtering at both Deutsche Bank and K+S. The former profiteers of inflation and the interest rate turnaround have to face the new realities. Higher valuation levels also make further price gains seem less likely. As a small cap, the Tocvan Ventures share is not without risk, but the external factors here are almost exclusively limited to financing risk. Thanks to investor Sorbie Bornholm, the Company is financed until mid-2024. Operationally, there is room for surprises.

    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.

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    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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