Close menu




February 25th, 2022 | 11:21 CET

Gazprom, Sberbank, Defense Metals, Airbus: Buy when the cannons thunder!

  • RareEarths
Photo credits: pixabay.com

The Ukraine crisis, or rather the Russia crisis, pulls its circles. The Putin case escalates more and more because the Russian president recognizes the eastern Ukrainian "separatist areas" of Donetsk and Luhansk as autonomous regions. A familiar tactics game of the Kremlin and at the same time an affront to the West. The EU and the US, as well as Great Britain and other states, are responding with sanctions. These hit several sectors - including banks and companies as well as Russian elites and families who support Putin's power apparatus. So far, trading in Russian stocks has not been sanctioned, creating low entry prices. We give a few important tips away from politics!

time to read: 4 minutes | Author: André Will-Laudien
ISIN: GAZPROM ADR SP./2 RL 5L 5 | US3682872078 , SBERBANK ADR REGS/4 RL3 | US80585Y3080 , DEFENSE METALS CORP. | CA2446331035 , AIRBUS | NL0000235190

Table of contents:


    Gazprom and Sberbank - Into the crisis with good figures

    Dealing with the new crisis is not that simple. After all, in the event of further escalation, there is a possibility that American and European banks will be prohibited from trading in Russian shares. There may even be a threat of suspension from the stock exchange. Because by far, the majority of Russian shares are a so-called American Depositary Receipt (ADR). These are securitized rights to the original shares deposited with a major US bank. In the event of sanctions or embargoes, these securities could be put on hold for the time being. There may then be panic selling on the stock market because people want to remain liquid in times of crisis.

    Apart from the political dangers, the well-known Russian stocks Gazprom and Sberbank have lost a lot of ground in the last 3 months. In the case of Gazprom, the discount from the high of EUR 9.44 is now almost 40%. Fundamentally, the oil and gas giant is earning splendidly. The dividend has been raised several times and now amounts to a full 18% at a share price of EUR 5.74. However, the issue of Nord Stream 2 is likely to continue to weigh on the stock for some time. In the case of Sberbank, the fall from the top at EUR 18.75 is even greater, with a shortfall of over EUR 10, or 57%. At the same time, the dividend yield is a handsome 10%. However, the bank could be very limited in its business operations in the future due to the pending sanctions. Both Russian stocks are ADRs and thus highly speculative.

    Defense Metals - New factual report on REE project at last IIF

    In times of crisis like now, the urgency in the availability of strategic metals becomes very evident again. The North American governments have made this deficit a top priority with China, meaning that any available and future resource will be highly valued. From this perspective, one of the few promising rare earth projects outside China is emerging in Canada.

    British Columbia-based exploration company Defense Metals is focused on advancing the Wicheeda Rare Earth Project, which covers approximately 2,008 hectares. President Luisa Moreno is an expert in materials management and a leading rare earth analyst. She has held senior positions in many GreenTech companies prior to Defense Metals, primarily in the strategic minerals sector. At the second International Investment Forum (IIF) (www.ii-forum.com), she provided deep insight into Defense Metals' project progress and international market development.

    A preliminary economic assessment (PEA) was conducted for the Wicheeda rare earth project in 2021. It provided a solid after-tax discounted net present value at 8% of CAD 517 million. The internal rate of return is a high 18%, but this could be extended if current prices were valid even if the project was implemented. Compared to the prices used in the study, spot prices are currently about 50% higher. A significant advantage of the current REE project is the production of a saleable, high-grade flotation concentrate. The PEA envisions an open pit operation with a mill throughput of 1.8 million tons per year and a stripping ratio of 1.75:1 (waste to mill material) over a mine life of 19 years, producing an average of 25,423 tons of REO (rare earth oxide) per year.

    Luisa Moreno commented, "We look forward to the initial assay results from our ambitious 2021 diamond drilling campaign at the Wicheeda REE deposit at 5,349 meters. Drilling in 2021 is expected to contribute to the expansion and upgrading of mineral resources recently demonstrated in our positive PEA for the Wicheeda Rare Earth Project." Defense Metals (DEFN) shares are currently trading at CAD 0.26. With 160.5 million shares, the current market value is just under CAD 42 million. The stock is also actively traded on Tradegate and Frankfurt. In times of crisis, strategic investments in future resources are not a bad idea.

    Airbus - Good figures compared to competitor Boeing

    Europe's largest aircraft manufacturer and defense contractor, Airbus, reports the highest profit in its history. On the other hand, its American competitor Boeing continues to be in deep crisis. It seems as if Airbus is sailing past the pandemic and will presumably soon finally distance itself from Boeing. The reason is that airlines are once again buying on a large scale, primarily from the European consortium.

    The aircraft manufacturer made a profit of almost EUR 4.2 billion last year, following a painful EUR 1.7 billion loss the previous year. In addition to more aircraft delivered, the results also reflect good results from the helicopter and defense and space divisions. US perennial rival Boeing recently presented a loss of nearly USD 4.3 billion due to the severe turbulence caused by the 737 Max disaster jet and the pandemic. The problems have not diminished because now the Dreamliner 787, of all things, is causing concern. This model has not been grounded, as was the case after the two 737 Max crashes, but deliveries have been halted for months due to significant quality problems with important components.

    Airbus management, meanwhile, is holding out the prospect of even better figures for the current year. Production is expected to increase by about 20%. With 611 aircraft delivered, the target is around 720 in 2022. Airbus currently has an order book of 7,082 aircraft worth EUR 345 billion, while Boeing's order book is much smaller at 4,200 aircraft. At EUR 112, Airbus shares are only just below the 52-high of EUR 121, while Boeing's gap to the top is a full 25%. As defense stocks, both shares are currently enjoying good attention on the markets.


    "Buy when the cannons are thundering" is an old stock market adage. In many crises, there were reasonable entry prices, but the timing proved difficult. Russian stocks are subject to the caveats of a possible suspension. Airbus shows an excellent outlook, and Defense Metals can present a clear plan until the production of rare earths.


    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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    André Will-Laudien

    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.

    About the author



    Related comments:

    Commented by Stefan Feulner on February 1st, 2023 | 18:17 CET

    Rheinmetall, Defense Metals, Lynas - Time is running out!

    • Mining
    • Tungsten
    • RareEarths
    • Defense

    Heavy weapons for peace. Tanks, submarines and fighter jets for Ukraine, whatever the cost. This scenario is the bitter reality right now and is being promoted across the board by Western politicians. It may not sound very understandable, but in order to guarantee peace, the world continues to arm itself. Companies in the armaments industry, now declared to be sustainable investment opportunities, are booming. With the seething conflict in Taiwan, tensions are again on the rise. With its raw materials, such as rare earth metals, China has the power to act. The West is frantically trying to reduce dependencies, which is impossible to achieve in the short term.

    Read

    Commented by Fabian Lorenz on January 31st, 2023 | 14:48 CET

    Energy transition price rockets: American Lithium, Plug Power, Auxico Resources

    • Mining
    • RareEarths
    • Lithium
    • hightech

    Are shares related to electromobility among the price rockets of 2023? In any case, the start of the year was promising. After a partially disastrous second half of 2022, many stocks are showing strength in the new year. Lithium shares, in particular, are in demand again. Among the high flyers of recent months is American Lithium. After the Nasdaq listing and the planned spin-off of the uranium division, investors are eagerly awaiting the feasibility study. Will the share price fireworks continue? Analysts also expect such fireworks at Auxico Resources. They believe that the share price of the trader of rare earths and critical raw materials could almost triple. Hydrogen pioneer Plug Power has also bounced back in the new year. But once again, the US company has disappointed operationally. How do investors react?

    Read

    Commented by Juliane Zielonka on January 26th, 2023 | 20:10 CET

    Freyr Battery, Auxico Resources, Plug Power - Rare earth battery boom in e-Mobility

    • Mining
    • RareEarths
    • fuelcell
    • Electromobility

    One of Norway's largest financial services companies is increasing its equity stake in Plug Power, the US hydrogen fuel cell company. The reason: Nikola Motors has selected the Company to upgrade its new e-mobility fleet with clean fuel cells. Freyr Battery also has similar ambitions. Here, Impact Clean Power Technology, the Polish manufacturer of battery systems for heavy-duty vehicles, has signed an agreement with Freyr to purchase clean batteries. Both big deals have one thing in common: demand for rare earths and valuable metals to make green technologies a reality. That is where Auxico Resources, a mineral exploration company focused on Africa, comes in.

    Read