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February 25th, 2022 | 12:07 CET

Dt. Telekom, Barsele Minerals, Munich Re - Top opportunities with discount!

  • Gold
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In the last few days, what was supposed to be prevented by diplomacy has become the bitter truth. Russia, in the person of Russian President Putin, has made the decision for a military operation and has advanced with its troops into eastern Ukraine. A heavy blow for the stock market, sending the DAX temporarily down more than 5% below the 14,000 point mark. That political stock markets have short legs has been shown all too often in the past. As a result, investors should take a closer look at companies that have lost significant value due to the Ukraine crisis but are making significant fundamental progress.

time to read: 4 minutes | Author: Carsten Mainitz

Table of contents:

    Deutsche Telekom - Forecasts raised

    The Deutsche Telekom share provides a prime example of the highly volatile political stock markets. The Bonn-based telecommunications company also lost more than 5% of its value in the first few hours of trading and is currently heading for resistance at EUR 15.50, which has been successfully tested several times. Should this be broken, the broad support at around EUR 14.00 should serve as a foothold. Given the positive fundamental corporate news, investors should put the DAX stock on their watch list.

    "We are not letting up," said Tim Höttges, CEO of Deutsche Telekom. "Our profits are growing in all areas. The Group remains on track for success." Revenue rose 4.7% to EUR 28.934 billion; analysts had expected EUR 28.758 billion. Adjusted EBITDA AL increased by 0.6% to EUR 9.007 billion; the internal cost forecast here was EUR 8.830 billion. Deutsche Telekom attributed the slow growth in part to a change in business practice in the leasing of terminal equipment in the United States. Net income decreased to EUR 0.471 billion in the fourth quarter from EUR 1.671 billion. Analysts had estimated EUR 800 million here.

    Deutsche Telekom expects adjusted EBITDA AL of around EUR 36.5 billion for the 2022 financial year, compared with EUR 37.3 billion in the past financial year. The reasons for the decrease are the deconsolidation of T-Mobile Netherlands and a change in the accounting treatment of terminal equipment leasing in the United States. The new key figure Core EBITDA AL is expected to increase by 5%. Free cash flow AL is expected to total EUR 10 billion, compared with EUR 8.8 billion in the previous year. In addition, an increase in the dividend from EUR 0.60 per share to EUR 0.64 was paid for 2022. At the current share price of EUR 15.60, this would be an attractive yield of 4.1%.

    Barsele Minerals - Blatant undervaluation

    While the stock market is in deep-red territory, gold can once again prove its function as a crisis currency. With a significant rise to USD 1,970 per ounce, the precious metal is approaching the psychologically important USD 2,000 mark again. Further uncertainty concerning the Ukraine crisis is likely to give gold wings in the coming weeks after little volatility in the gold market in recent months. After the correction since August 2020, many shares of gold producers and exploration companies have returned to attractive entry levels.

    One good opportunity is in Scandinavia. Barsele Minerals operates the eponymous Barsele project together with Agnico Eagle in northern Sweden. The property covers 34,500 hectares in the Fennoscandian Shield and has a potential of over 5 million ounces of gold, according to Belcarra Group executives who run Barsele Minerals. Back in 2016, the Royal Bank of Canada (RBC) conducted a valuation of the Barsele Gold Project for Agnico Eagle. At a gold price of below USD 1,350 at the time, the experts calculated a value of USD 375 million.

    With a 55% stake, Agnico Eagle owns the majority, while Barsele holds 45%. For Barsele, this is a comfortable and low-risk position because Agnico Eagle bears the costs as operator. In recent years, Agnico Eagle has driven exploration and drilled around 155,000 meters, with a total of 404 wells drilled.

    Recently, regional exploration work found a high-grade boulder grading 90.8 g/t Au against the direction of ice flow northwest along a known boulder stream discovered in 2016. It is believed to be similar to the other boulders found in the area. In addition, the first tranche of a CAD 2 million private placement announced on January 6, 2022, was completed. Under the first tranche, the Company issued 825,000 units of the Company at a price of CAD 0.50 each for total gross proceeds of CAD 412,500.

    Munich Re - Share slumps after figures

    Similar to Deutsche Telekom, things went downhill despite good figures. Due to market conditions, the price fell by around 4.5%. Broad support for the reinsurer lies in the area around EUR 230.00. Despite the Corona pandemic and flood disasters, a profit of EUR 2.9 billion was achieved, thus pulverizing the previous year's profit by a factor of just under 2.5. In addition, the profit was around EUR 100 million higher than the Company's own forecasts. In the new year, Munich Re expects a profit of EUR 3.3 billion, a further increase of 12%. The dividend is also expected to increase by 12% so that EUR 11.00 will then flow to investors.

    After the figures, analyst firm Jefferies reiterated its rating for Munich Re at "Buy" with a price target of EUR 300. While an unexpectedly high combined ratio did not go down well in the market, analyst Philip Kett wrote. Although the reinsurer is already the world's largest, he added that it continues to grow faster than its peers.

    The stock market responded in deep red after Russian troops invaded eastern Ukraine. While Deutsche Telekom and Munich Re presented strong figures, the pull of the overall market dragged them down. In contrast, gold stocks such as Barsele Minerals, which are at an attractive level after the correction, are bullish.

    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

    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.

    About the author

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