July 2nd, 2021 | 12:15 CEST
Freenet, Almonty Industries, Lufthansa - Setbacks offer entry opportunities
Table of contents:
"[...] While tungsten has always played an important role in the chip industry, it is now being added to batteries for e-cars. [...]" Lewis Black, CEO, Almonty Industries
freenet - High dividend yield
On June 18, the day of the Annual General Meeting, consolidation set in. The Company's Management Board was unable to convince shareholders of its new compensation model. Two-thirds of the capital present decided against the proposal. That was somewhat surprising, as there was even a special dividend of EUR 0.15 in addition to the normal EUR 1.50 dividend.
The share has fallen from EUR 22.90 at its high to EUR 19.75 and is now consolidating at the critical EUR 19.78 support level. The losses cannot, therefore, be blamed solely on the dividend discount. Analysts at Goldman Sachs complained that EBITDA is currently only rising due to growth in the IPTV business. There were also difficulties with the freenet FLEX app recently so that it was even removed from the Google Playstore. These problems have since been resolved.
On June 24, the Company reported that a total of 232,977 shares had been acquired via the share buyback program. Analysts at Warburg Research see the fair value of the stock at EUR 25, citing evidence of the business model's resilience in the Corona Crisis. Dividend hunters can put the first position in the portfolio thanks to the setback.
Almonty Industries - The groundbreaking is done
Almonty Industries is mining and processing tungsten at the Los Santos mine in western Spain and the Panasqueira mine in Portugal. The current primary focus is on the development of the Sandong Mine in Korea. Last December, the Company received a loan commitment of USD 75.1 million. The increase of equity by USD 10.1 million was agreed as a condition. Listing of the Company on the Australian stock exchange ASX will raise between USD 11.5 and 19.2 million. The executing bank has guaranteed USD 11.5 million, and nothing now stands in the way of the loan. In related news, Andrew Frazer was appointed to the board on June 1.
First Berlin Equity Research confirmed its BUY recommendation on June 16 and raised the price target to CAD 1.55. It was justified by the inclusion of the molybdenum deposits at the Sangdong Mine. The rationale is based on an estimate from the 1980s when a resource estimate of 17 million tonnes containing 0.4% molybdenum disulfide was published based on drill results. Confirmation drilling is expected to start in the area in the coming weeks. On May 28, ground was broken at the Sandong Mine site. That is a milestone because currently, China has a virtual monopoly on tungsten, and the Sangdong Mine is one of the highest-grade and longest-lived in the world. Added to this is the 15-year offtake agreement with Plansee.
Although the stock has come under some pressure since mid-June, the issuance of the new shares is a crucial step to significantly increase the Company's value in the long term. Deutsche Rohstoff AG is one of the anchor shareholders with 12%. On June 30, the critical CAD 1 mark was defended. With this setback, one can therefore buy with a clear conscience because, in the long term, Almonty will become one of the largest tungsten producers in the world.
Lufthansa - Too many uncertainties
Now that the summer vacations are starting in more and more German states, one would think that Lufthansa would benefit. But the share price is not making headway for various reasons. On the one hand, the Delta mutation has already forced Portugal vacationers to cancel their vacations early. No one knows whether the German government will add more countries to the list. In the short term, many return flights will then be booked, and the airlines can demand high prices, but for the time being, Germans will no longer want to vacation in risk areas. On the other hand, many flights will be canceled.
CEO Spohr is trying to spread confidence and believes that lucrative business travel will increase again. He hopes for a decline of only 10%. The Group wants to transfer the aid money back to the German government before the end of September and therefore announced a capital increase. According to the resolution of the Annual General Meeting, up to EUR 5.5 billion is possible, but probably only around EUR 3 billion will be collected. With a current market capitalization of around EUR 5.4 billion, this is quite a dilution.
The share has broken the psychologically important EUR 10 mark downward without much resistance. In addition, the 200 moving average and a support level of EUR 9.46 have been undercut. The next support area is at EUR 8.80. Bankhaus Metzler recently downgraded Lufthansa to Hold. We cannot recommend this setback as a buy under the given conditions of the capital increase and the uncertainty due to the delta mutation.
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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.