August 13th, 2021 | 10:34 CEST
Desert Gold, Barrick Gold, Nordex - These are the winners!
Even if inflation in the US has fallen slightly compared to the previous month, it is still at a high level of over 5%. This cannot be explained away. Despite all efforts of central bankers worldwide to regard the high inflation as only a temporary phenomenon, it is more advisable to adjust to the more realistic scenario of a persistently high inflation rate. To protect oneself as an investor against the loss of purchasing power, it helps to invest in tangible assets such as shares, real estate and commodities. With the following three companies, investors have good cards to be on the winning side.
time to read: 3 minutes | Author: Carsten Mainitz
ISIN: DESERT GOLD VENTURES | CA25039N4084 , BARRICK GOLD CORP. | CA0679011084 , NORDEX SE O.N. | DE000A0D6554
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Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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DESERT GOLD VENTURES INC - Soon, the time will come
Desert Gold Ventures stock is still barely on the radar of investors. As a result, there is a tremendous investment opportunity. The share certificates of the Canadian gold explorer have corrected significantly in the last 12 months from CAD 0.30 to CAD 0.13. As a result, the Company is currently valued at only CAD 18 million, which is far too low given the quality and size of the important project and the emerging development progress.
Desert Gold is focused on deposits in the West African countries of Mali, Ghana and Rwanda. The Company's most significant asset is the SMSZ project in southern Mali on the border with Guinea. Named after the shear zone between Senegal and Mali, the SMSZ project (Senegal-Mali Shear Zone) covers 410 sq km. It is the largest contiguous non-producing land package in the region. Several producing Tier 1 gold mines are located in geographic proximity. These include B2 Gold's Fekola mine, Barrick's Gounkoto and Loulo mines, and Allied Gold's Sadiola and Yatela mines. Mali is, after all, Africa's fourth-largest gold producer.
Previous drill programs have delivered good results and led to the identification of more than 20 gold zones. The current drill program, which is expected to be completed this summer, will drill 20,000 m. The program will focus on the exploration of existing zones as well as the discovery of new zones. The Company had already completed more than 80% of the campaign with over 230 drill holes at the end of June.
Therefore, things will get exciting soon when Desert Gold publishes its first drill results. A NI 43-101 compliant resource estimate could even be produced by the end of the year, allowing a more accurate determination of the project's recoverability. But already, the new drill data will be a good indication of the potential. In our opinion, it is only a matter of time before the undervalued stock is kissed awake.
BARRICK GOLD CORPORATION - Risks under control
With adjusted quarterly earnings of USD 0.29 per share, the Canadians recently beat market expectations, which were for EPS of USD 0.26. Shareholders will benefit from the Company's success with an announced dividend of USD 0.09 and a special dividend of USD 0.14. Barrick also reaffirmed its full-year guidance. The Group is benefiting from high gold and copper prices.
But it is worth looking at the cost side because margin pressure can naturally arise from here. In this respect, the CEO's recent statements are interesting. What we learn is that the world's second-largest gold producer built up storage capacities at a very early stage and was thus able to largely avoid price increases for goods and corona-related logistics problems. Only a further increase in the price of oil would impact the Group's cost base. Company CEO Bristow put the increase due to this effect at a mere 1% - a level that can be absorbed. Barrick remains a fundamental investment in the commodities sector.
NORDEX SE - In the right direction
The Group's half-year figures pleased the stock market. Even in the days before, the price of Nordex stock climbed. An ideal world? Not yet. Sales have increased and order intake has risen, but earnings are negative. Nevertheless, the loss was reduced enormously compared to the same disastrous period last year.
The CEO's comments that the turmoil in the raw materials and logistics markets is still being felt carries a lot of weight when you look at the industry. Competitor Vestas recently cut its full-year forecast due to significant corona-related constraints in a number of countries. Unsurprisingly, the stock reacted negatively to this. It should be noted that the Danes have already had to lower their expectations several times and that market participants bitterly resent this. In summary, Nordex is on a good path back to profitability and with a realistic view of the business environment. The share price should continue to reflect this positively.
Shares offer inflation protection. With Barrick Gold and Desert Gold shares, investors can also benefit from rising precious metal prices. Barrick Gold is an established player in the market, which analysts rate positively. If you are looking for a strongly undervalued share whose price could soon rise significantly in the wake of good drilling results, you should take a closer look at Desert Gold.
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