18. May 2021 | 09:42 CET
Commerzbank, Theta Gold Mines, Deutsche Telekom - Enormous catch up potential here
For many years, the "people's share" of Deutsche Telekom led a shadowy existence. While other DAX stocks have been able to multiply in recent years, the telecommunications company has been stuck in a sideways movement for more than five years. At present, driven by the excellent performance of the US subsidiary, the chances of breaking out of the lethargy are good. The technical situation for gold is comparable. A breakout from the downward trend formed since August could catapult the precious metal to new heights.
time to read: 3 minutes by Stefan Feulner
"[...] 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.
Deutsche Telekom - Breakout imminent
At EUR 17.21, the Deutsche Telekom share was up 2.4% yesterday and only just below its high for the year of EUR 17.40. A breakout would clear the way for the 2017 high at EUR 18.14. With a breakout, Deutsche Telekom would break through a high point that has existed for more than 20 years, which in turn, should give the price another significant boost. A broad support zone protects the share in the EUR 16.50 area.
The reason for the strong increase was an upgrade by the British Barclays Bank. The experts raised the share of the Bonn-based Company to "overweight" and increased the price target to EUR 23. The Barclays analysts were particularly impressed by the wholesale division, in which Deutsche Telekom does business with other telecommunications providers or resellers.
The Company is also getting a tailwind from its subsidiary T-Mobile US, a leader in the future market of 5G networks in the United States. T-Mobile US' 5G network, which is currently still under construction, reaches almost 300 million people. Compared with its nearest rival, AT&T, this means twice as much network coverage. The third-largest telecoms group in the United States topped analysts' estimates in its first-quarter figures. Revenue reached USD 19.8 billion with a profit of USD 933 million, which equates to earnings per share of USD 0.74.
Theta Gold Mines - Strong margins
Gold prices are also poised to make a comeback. After hitting a March low and forming a double bottom at USD 1,680, it has started to climb steeply again due to increasing inflation concerns among investors. The price per ounce is currently trading at USD 1,863, and yesterday broke through the medium-term downtrend line at USD 1,855. The next target is the level of around USD 1,875. In addition to the resurgent gold price, attractive, undervalued gold mining stocks also come to the fore.
The share of Theta Gold Mines stands out here for several reasons. Firstly, the Company is about to transition from a junior exploration company to a gold producer by 2022 at the latest. Secondly, Theta Gold Mines offers very low production costs compared to the rest of the industry, currently 50% below the current gold price.
The Company owns over 62,000 hectares of gold mining rights covering the majority of the Eastern Transvaal Gold Fields, approximately 350 km east of Johannesburg. By targeting high-grade, near-surface gold reef deposits at the Pilgrims Rest and Sabie Gold Fields, management plans to produce over 350,000 ounces of gold through modern mining and gold processing techniques. In total, Theta Gold Mines owns 43 historic mines. To generate a sustainable cash flow, the Company will start developing initially three near-surface mines step by step. In the future, underground mining for the precious yellow metal is also planned.
A pre-feasibility study for underground mining was completed in mid-April. Theta Gold Mines' stock has recently begun trading in Frankfurt in addition to the Nasdaq OTCQX Best Market. More than 60% is in the hands of institutional investors. The share price currently stands at USD 0.18. Analysts at Zacks Small Cap Research gave the stock a "buy" rating with a price target of USD 0.69.
Commerzbank - Is this the turnaround?
Crisis-stricken investors in Commerzbank have had to endure a lot of pain in recent years. Since 2007, when the share was still trading around EUR 280 after adjusting for the split, it has lost over 95% of its value. With the figures for the first quarter, which were surprisingly positive even for analysts due to the good conditions on the capital markets, the encouraging development of private customer business and the cost savings implemented, cautious hope of a turnaround is now germinating again.
While analysts had expected, on average, a loss of EUR 131 million, CEO Manfred Knof, who has been in office since January 1, 2021, presented a consolidated net profit of EUR 133 million. The quarterly profit came as a surprise mainly because, as announced, the bank set aside EUR 465 million for severance payments to more than 10,000 employees who were no longer needed due to restructuring measures.
Due to the encouraging quarterly figures, the German bank increased its price target from EUR 6.00 to EUR 6.50, and they left the rating at "hold." After doubling in price since the lows in April of last year, the share was quoted at EUR 6.40 in increased trading. A breakout above the resistance at EUR 6.80 would give the share a boost towards EUR 8. However, we see a quick breather in the area around EUR 6 due to the overbought condition in the short term.