June 14th, 2023 | 07:20 CEST
Despite the heat pump - uranium is in demand as never before! Rheinmetall, GoviEx Uranium, Palantir, C3.ai
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
GoviEx Uranium - Facing big jump in Africa
Once again, another monthly gain in the uranium spot price. Starting from around USD 25 in 2020, prices in the commodity markets have been gradually rising. Currently, it does not look as if this trend will change any time soon. Many uranium deposits are under the political influence of Russia. However, given the global sanctions against the aggressor, the leadership in Moscow has no great desire to continue supplying the West with critical metals. On the contrary, Kazakhstan, as one of the leading producers, is under Moscow's supervision and is struggling to meet its contractual obligations.
China has announced a dramatic expansion of its nuclear technologies. There are also currently 47 nuclear reactors in the Chinese pipeline that are expected to come on stream within the next eight to ten years. Germany may be out of the loop on this one, but France, the UK, Poland and the Czech Republic are taking their place, as is Ukraine, which is hoping for trillions in investment from the EU once the war is over. 57 million pounds, or the equivalent of about 32% of total annual demand, global uranium production fell short of demand in 2020. By 2025, a total shortfall of 200 million pounds is projected. The Canadian company GoviEx Uranium is moving forward with its property in Niger, Africa. It is in the immediate vicinity of Global Atomic's and Areva's mining sites. The GoviEx projects named Madaouela in Niger and Mutanga in Zambia are in focus. The third property, Falea in Mali, was to be sold to African Energy Metals Inc. However, this deal was recently cancelled.
For the upcoming projects, GoviEx has issued 85.71 million shares at CAD 0.16 in a private placement, with the same number of warrants at a strike price of CAD 0.19. The shares have already seen lows at around CAD 0.13 and have been trending upwards again for a few days. The almost 786 million shares add up to a market value of CAD 126 million. Uranium properties in Africa offer a good investor base. A further upward valuation is evident in the current environment.
Rheinmetall - Analysts are very positive
The Rheinmetall share is truly a phenomenon. Although the business figures are only gradually increasing, investors likely sense the big bonanza in the medium term. The initial spark was the 100 billion in special funds for the Bundeswehr, which the German government enshrined in the Basic Law in 2022. Analysts now assume that Rheinmetall will be able to book a large chunk of these investments as sales. It is not surprising that the analysts' estimates are somewhat at the upper end and show an increase from EUR 6.4 billion in 2022 to EUR 7.8 billion in 2023 and almost EUR 11 billion in 2025. Growth is thus assumed to be around 15% to 20% per year. Profitability measured by the EBIT margin is expected to develop disproportionately from about 11% to 14%. High R&D expenditures are expected.
Should the aid for Ukraine be significantly expanded, there should indeed be very large jumps at Rheinmetall because Rheinmetall profits only moderately from the orders of the German armed forces with many other contractors. On the Refinitv Eikon platform, analysts are unanimous. Of 15 experts surveyed, 13 issued a buy recommendation, and the median 12-month price target is EUR 296.40 - just under 20% above the current quotation. The share is currently consolidating at a high level but has already reached an annual high of EUR 281 and should not fall below EUR 233. Set a suitable stop at approximately EUR 238 for profit protection, as the share is technically battered at EUR 248.
Palantir and C3.ai - Military technologies in demand
Those who think of artificial intelligence quickly end up with the currently popular NASDAQ stocks Nvidia, Palantir or C3.ai. What they all have in common is investors' fantasy that in the next few decades, large areas of our lives will be influenced by learning machines. Since media and telecommunications companies, in particular, have a lot of data on their users, Big Data has become a buzzword for people who believe in technology. Supposedly, all collected and aggregated data can be used to create a perfect forecast of how consumers and decision-makers will react in certain decision-making constellations. So if you have a lot of past data, with the appropriate computing power and good data analytics software, you can anticipate future actions with high probabilities.
With its public contracts in the field of military intelligence, Palantir has recently also been able to cause a corresponding stir in Ukraine. C3.ai is a competitor in the private sector and empowers companies with its service for the use of artificial intelligence and helps to advance the level of digitalization. Both stocks are well-positioned in the current environment of disruptive change. Palantir is making small profits. The P/E ratio is close to 70 based on 2023 estimates. C3.ai will not be in the black until 2026 - maybe. With over 100% share price increases in 6 weeks, decent momentum has already been processed with prices of USD 15.80 and USD 37.50, respectively. Tighten your trailing stop with a 10% profit protection line in the upward trend and enjoy the gold rush.
Digitalization is advancing. Globally, this is causing energy consumption to go up rather than down. This requires new energy sources, and nuclear energy is being considered again by many countries despite the Fukushima incident. As a result, the uranium stock of GoviEx remains in focus. Defence and highly specialized IT companies also benefit from this environment.
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