March 14th, 2023 | 11:31 CET
Great opportunities, low risk: Vonovia, Canadian North Resources, Rheinmetall
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"[...] 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
Vonovia: More solid than expected, nevertheless in clan liability
One thing has been crystal clear for years: real estate is going up. Since interest rates dropped significantly in the wake of the euro crisis and reached 0, real estate prices have also been climbing. Even people who had nothing to do with investments until then hung on every word of resourceful influencers and bought apartment after apartment - 100% financing made it possible. But in the meantime, some "Real Estate-preneurs" have come down to earth. Approaching refinancing and the new requirements for climate protection are making budding millionaires sweat. Vonovia is using a similar model to these investors - albeit on a large scale. The principle of buying and managing apartments in a package with a fair amount of borrowed capital paid off over a long time - until the interest rate turnaround came. The market has been puzzling ever since about the potential for corrections at Vonovia and Co. In fact, one might even suspect hidden reserves in the balance sheets, but investors have made the calculation without the market - whose rules have long since lifted such reserves and trimmed the balance sheets of real estate companies to efficiency even before the turnaround in interest rates.
Nevertheless, Vonovia's business model is considered solid. The key figure funds from operations, which excludes one-off effects and changes in valuation, climbed by a whopping 35% in the latest 9-month figures. The takeover of Deutsche Wohnen also boosted Vonovia's rental income by more than 55% in the nine-month period. Vonovia does not believe that it will be strongly affected by rising interest rates, although value adjustments to its portfolio are very likely. However, there is no reason to panic - even rating agencies like Moody's have recently remained relaxed. The Vonovia share is not currently in a good economic position. The days of concrete gold are over. However, the dividend yield of currently around 6.5% is decent.
Canadian North Resources: Future metals in advanced project
Those who prefer to bet on real precious metals instead of concrete gold can take a closer look at the shares of Canadian North Resources. The Company operates the Ferguson Lake property with a size of about 250 sq km. Among them are the precious metals palladium and platinum, as well as nickel, copper, cobalt and rhodium. The project has been in existence since the 1950s. The owners have already drilled a total of 200,000 meters. The current resource estimate provides notable deposits of copper (947 million pounds), nickel (552 million pounds), cobalt (62 million pounds), palladium (2.1 million ounces) and platinum (0.38 million ounces). The property is considered promising due to the continued exploration potential. In addition, existing mines of Agnico Eagle and ValOre are located in the immediate vicinity.
Canadian North Resources impresses above all with the numerous metals that are urgently needed in the course of the energy transition. The location in the Canadian district of Nunavut also offers legal security and a good investment environment. What is also special about Canadian North Resources is the low free float: only around 20% of the shares are tradable on the stock exchange. The rest is in the hands of institutional investors and management, who are confident that their project will succeed. In the foreseeable future, the Company will likely expand its resource base and make final considerations on profitability for the time being. Then the market could look at the Company, currently valued at around CAD 310 million, with different eyes. Canadian North Resources offers investors access to a promising project in a secure legal framework and has several much-needed metals in its portfolio. This stock is worth a look!
Rheinmetall: An entry will be difficult
The Rheinmetall share - ideally directly on the morning of 24 February 2022 - was also worth a look. Since the war in Ukraine has been raging, the share has staged a brilliant rally and gained around 70%. The fact that the share price has reached the level it reached at the beginning of the war several times last fall shows that the market sometimes does capricious things. Given the rising defense budgets worldwide, Rheinmetall's business will likely remain solidly supported for years to come. The stock is currently expensive, and politicians are beginning to haggle over every euro of the defense budget. This could weigh on the share again. However, investors should take advantage of any signs of weakness. Deterrence is again a topic, unfortunately.
Rheinmetall's share price weakness last fall showed that there are no sure bets on the market. However, valuations can provide orientation. Those who get in at a low price usually have upside potential. In the case of Vonovia, bargain hunters will likely have to wait a while longer, given the falling prices on the real estate market. Investors will also have to take a risk with Rheinmetall - further developments are too uncertain, and the stock is too expensive after the rally that has already taken place. However, Canadian North Resources could offer potential; anyone who compares the Company with competitors such as Chalice Mining or Noront Resources can discover the potential.
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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