Globex Mining, Deutz, Novo Nordisk – Prices are rising!

Globex Mining – Strong portfolio continues to grow

Through Globex Mining, investors participate in an extensive commodity portfolio. This includes more than 250 exploration, development, and license areas in North America. In addition to precious metals such as gold and silver, investors benefit from price increases in base metals such as copper and nickel. Access to specialty metals, rare earths, and industrial metals round out the portfolio.

A few days ago, the company provided an update on its assets, including its financial portfolio, options and royalty interests, and real estate holdings. The financial portfolio is transparent and easy for investors to evaluate, as it consists of liquid assets such as cash, bonds and stocks. At the beginning of September, the value of the financial portfolio was just under CAD 35 million, representing a remarkable 8% increase since the end of June alone. Notably, nearly half of the Company's current market capitalization is backed by liquid assets.

The royalty portfolio consists of 110 royalties - i.e. payments to which the Canadian company is entitled as license or production fees when certain projects (e.g. a mine) generate revenue. More than half of these agreements are related to gold. The project portfolio is similarly dominated by gold projects, with a total of 80, though rare earths, copper, nickel, and lithium are also represented.

This broad diversification offers investors an excellent risk-return opportunity. It is hardly surprising that the Company's shares have gained around 65% in the last 12 months, outperforming most commodity price trends.

Deutz – Entry into the defense industry

Some industrial companies have long recognized the potential of the defense market and are increasingly expanding their presence - either organically or through acquisitions. The stock market welcomes such moves, as the growth of the defense sector currently appears unstoppable in light of current geopolitical tensions and enormous government budgets. The share price rallies of Rheinmetall & Co. underscore this all too well.

Engine manufacturer Deutz has recently taken a step in this direction. Some time ago, the Company announced its intention to acquire drone propulsion specialist SOBEK. To finance the acquisition, the Cologne-based company needed fresh capital and carried out a capital increase of around EUR 130 million at a price of EUR 9.45 per share. The stock is currently trading slightly above this level, and the share price has already doubled in the past 12 months.

Despite the sharp rise in the share price, which catapulted the stock to a level not seen in 18 years, Deutz shares appear reasonably valued at first glance. With a market capitalization of around EUR 1.5 billion and a price-to-sales ratio of less than 1, the Company compares favorably to peers with full or partial exposure to the defense sector. However, Deutz's key weakness remains its low operating margin, which currently stands at just a few percent. CEO Schulte also addressed this aspect of the takeover. The aim is to become less dependent on the cyclical combustion engine business by expanding into the defense sector. It will be interesting to see how the Company's financial performance evolves in the coming quarters.

Novo Nordisk – Analysts remain skeptical

In the summer of 2024, the Danish pharmaceutical company's share price was skyrocketing. Market leadership in products for combating diabetes and obesity, and seemingly endless growth fantasies, had given the stock wings and fueled its rise to nearly EUR 140. The picture today is different.

Investors can currently purchase the stock for less than EUR 50. The Danes have lowered their forecasts several times this year. Recently, the Company shocked the market with the announcement that it intends to cut several thousand jobs. Historically speaking, the stock is not expensive with a P/E ratio of 13 to 15. There are still critical voices among analysts. Overall, however, experts believe the shares have the potential to gain nearly 30% over the next 12 months.

Quality and profitability remain key

The stock market values future potential - and investors believe Deutz has a bright future. However, the improvement in margins must first be implemented. The reality check comes after the premature praise. In contrast, Globex Mining presents a more attractive risk-reward profile, thanks to its smart, diversified portfolio strategy in the growing commodities sector. As for Novo Nordisk, while a short-term rebound is possible, the stock still has a long road ahead before reclaiming its previous highs.