19. January 2021 | 09:14 CET
Fokus Mining, Yamana Gold, HelloFresh: The lockdown can come!
Another lockdown is expected today. Until early January, almost nothing moved in Germany. The stock exchanges started the new year with optimism and produced immediate new highs, but now disillusionment has returned. The markets probably had a gradual easing in mind, but the trend is more toward further tightening. China has already got back on the growth curve with a GDP of plus 6.5% in the last quarter. We enjoy such figures with caution and look at selected, successful companies.
time to read: 3 minutes by André Will-Laudien
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
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.
Fokus Mining - The Galloway Project in 2021
The gold market shows a typically high level of consolidation at the beginning of the year. At the end of the year, from USD 1,950, it went down to USD 1,830 in the last 2 weeks. Such movements serve to raise money at the beginning of the year because investors' risk budgets are filling up slowly.
Fokus Mining is preparing for the new year 2021 and continues its drilling program at the Galloway project. The zone is located in one of Canada's best-known gold belts, immediately adjacent to the Cadillac-Larder Lake Fault. Historically, more than 100 million ounces of gold have been mined there. Using modern mining methods, one is no longer dependent on bonanza gold but is looking for zones that allow secure mining over many years. This is the only way to make mining investments profitable.
The zones GP, Moriss and Hendrick, also known under the name "Golden Triangle," enjoy center attention. Fokus has secured its land rights so that an aisle of 1.7 kilometers can be explored together with the Hurd Zone. If the current drill program confirms current assumptions, one can expect a complete reassessment of the Company.
In September 2020, there were another 12.5 million shares after the price had increased eightfold since the March low. Most recently, the stock has ranged between CAD 0.28 and CAD 0.46, and yesterday it cost CAD 0.34. If the gold price turns around, the share price will immediately return to CAD 0.50 - and perhaps significantly more after the announcement of the drilling results.
Yamana Gold - Solid setup in the new year
The mining Company Yamana Gold was founded in 1980 in Toronto and mines from Argentina, Brazil, Chile and Mexico. Of the eight mines, six are 100% owned by the Company. Strong expansion allowed gold production to exceed one million ounces as early as 2008. In 2012, the Cerro Moro project in Argentina was purchased from Extorre Gold Mines. Finally, in 2014, Yamana acquired a 50 percent interest in the Canadian Malartic Mine through a joint venture with Agnico Eagle Mines.
Yamana Gold has been advancing several projects in its generative exploration program since 2020, and it outlines specific plans to advance these in 2021. In December, progress was already reported at Lavra Velha, Monument Bay, Borborema, and the program is expanding to include two early-stage projects in Chile for 2021.
The program's first year showed significant progress by year-end, notwithstanding limited drilling activity due to the Covid-19 pandemic. Based on current information, the Company is confident of discovering Inferred Mineral Resources of at least 1.5 million gold equivalent ounces within three years at all projects. The results underscore the scope, breadth, optionality and value of Yamana's generative portfolio. The portfolio now consists of eleven projects.
Yamana Gold today emerges as an aspiring mid-tier producer. The stock has corrected a full 25% since August 2020 and is now back up to EUR 4.22. With a capitalization of EUR 3.9 billion, Yamana is a solid long-term portfolio addition.
HelloFresh - The next harvest
For HelloFresh, the current pandemic times are not quite as bad as they are for us humans or for many other industries struggling to survive on a daily basis. It's all a business model choice, one might say, but away from the Covid-19 turmoil, HelloFresh certainly has good cards to be among the winners again in the next lockdown. One man's joy, another man's sorrow.
After the IPO planned for 2015 did not materialize, the capital market step succeeded two years later: Since November 2, 2017, the HelloFresh share has been traded in the Frankfurt Prime Standard. At an issue price of EUR 10.25 per share, the Company was valued at around EUR 1.7 billion at the time. In May 2019, Rocket Internet announced that it had sold its shares in HelloFresh for EUR 373 million. From today's perspective, 2 years too early, but the Samwer brothers certainly made a good cut.
In the second quarter of 2019, an adjusted pre-tax profit of EUR 18.3 million was reported for the first time. The current figures could already demonstrate a rolling doubling of revenues in 12 months in the third quarter of 2020, and earnings per share will be around EUR 2 for 2020. According to analyst estimates, this provides a P/E ratio of about 32 - the Company is growing by about 25% per year. Here the lockdowns could still suggest premiums.
HelloFresh's market capitalization has increased sevenfold since its IPO, but what about its valuation? If HelloFresh were to hit the EUR 4.5 billion mark in revenue this year, the P/E would be around 2.5, which would still be cheap compared to the US DoorDash. However, the MDAX share is not listed on NASDAQ. All in all, the current year should bring a further leap in growth for HelloFresh. We will stay tuned!