June 8th, 2022 | 10:15 CEST
Glencore, Globex Mining, SGL Carbon - Safeguard your money!
Table of contents:
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Glencore - The giant from the Canton of Zug
Few people associate the Alpine country of Switzerland with commodities trading, and only die-hard stock market experts know that the operational headquarters of the world's largest commodities trader, Glencore, is located in the tranquil little town of Baar in the Canton of Zug. Glencore, listed on the stock exchange with a value of EUR 79.80 billion, is one of the most important producers and marketers of more than 60 raw materials at around 150 locations worldwide in the mining, metallurgy and oil production sectors.
Driven by sharply rising commodity prices, Glencore's share price has more than quadrupled since mid-2020. At GBP 542.90, it also reached a new all-time high. Due to the substantial increase in stock market value on the one hand and the significant price losses of the shares of the sporting goods manufacturer Adidas on the other, the Swiss have now been able to gain a place in the STOXX Europe 50.
The share price could not be slowed down even by fines amounting to billions of euros, which were imposed due to bribery payments from the past. Accordingly, Glencore must pay just under USD 1.1 billion in fines in the USA and Brazil; the amount of the payment to British authorities is still being determined. Proceedings in Switzerland and the Netherlands also have yet to be concluded. According to experts, a total of around USD 1.5 billion could be collected. This ends nearly 4 years of investigations in several countries against the commodity group.
Globex Mining - Perfectly diversified
The performance of Globex Mining was similarly strong. The fact that the Canadian asset manager for the commodities sector is a perfect hedge against sharply rising inflation due to its broad diversification plays a significant role. As a result, the share price has increased more than fivefold since the Corona low in March 2020, from CAD 0.25 to currently CAD 1.35. Nevertheless, the stock market value is only EUR 55.24 million. That means the share, which is also traded in Frankfurt and Toronto, is likely to continue to trade well below its net asset value.
Experienced CEO Jack Stoch has managed the debt-free company since 1983. The Company has grown for decades without major dilution through capital increases. Its business model is to option land parcels from its holdings in exchange for cash and shares, thereby retaining royalties on which future production can be based. In addition, the option partners assume the exploration risk. In addition to acquiring and optioning properties, the Company also develops its own properties at a minimum rate of CAD 1.5 per year.
There are around 210 projects in the broadly diversified portfolio, including precious metals such as gold, silver, palladium and platinum, and base metals such as copper, zinc, lead and nickel, speciality metals and minerals. Geographically, the management also focuses on diversification with properties in the USA, Canada and Germany. The cash ratio is a strong CAD 20 million.
Positive news recently came from the Labyrinth Gold Mine royalty property in Quebec, where Globex Mining will receive a 5% gross metal royalty on the first 25,000 ounces of gold produced from the property. After that, the royalty is 3%. Thus, according to Labyrinth Resources, the flagship project is nearing completion with over 4,390m of diamond drilling completed. Results from 8 drill holes are still pending, with 6 expected in the next two weeks. Management was extremely pleased as mineralization continued to be identified over several historically modeled layers through the first real exploration in over ten years.
SGL Carbon - Better prospects
The price of carbon fiber specialist SGL Carbon rose by more than 12%. After the Company raised its forecasts, the share price rose above the prominent resistance area at EUR 6.00 to more than EUR 6.70. The Company is now forecasting higher sales and operating profit than at the beginning of the year. In terms of sales and operating profit, the Group now expects more than it had forecast at the beginning of the year. Business development was good in all four areas. The Company said that increased costs for raw materials, energy and transport could be passed on "largely successfully".
Adjusted operating profit (EBIT) is expected to reach EUR 70 million to EUR 90 million instead of the EUR 50 million to EUR 70 million previously budgeted. Sales are even expected to rise to EUR 1.1 billion. The medium-term targets for 2025 remain in place. SGL Carbon appears attractive in the long term, but a setback after the strong breakout is likely.
Inflation is at its highest level since the 1970s. According to experts, it is likely to remain at the increased level. Globex Mining, as well as Glencore, offer themselves as hedging instruments against inflation. SGL Carbon was able to overcome an important resistance.
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.
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