Hensoldt AG, Almonty Industries, Vonovia - New opportunities after the crash

Almonty Industries enters a critical phase

As recently as last Tuesday, one could have added an Almonty Industries share to the portfolio for CAD 0.63. Since then, the share price of one of the world's largest tungsten producers has risen by 10% to CAD 0.70. Given the Company's developments, it is highly unlikely that this marks the end of the price rally. The Canadian company is now entering a critical phase, which could lead to a significant multiplication of the share price.

Almonty Industries is currently in the process of completing its tungsten mine in South Korea and will then be one of the world's largest sources of the critical metal in the future, accounting for around 30% of global tungsten production outside China. Production at the Sangdong mine is scheduled to start as early as the end of the current year with the extraction of 2.3 tons of tungsten oxide, which will then be continuously expanded to 4.8 tons.

In mid-July, Almonty Industries received the seventh and eighth disbursements from the KfW IPEX-Bank loan for the Sangdong tungsten project as construction progressed as planned. The Company received a further USD 10.6 million, bringing the total credit line to USD 75.1 million.

In the latest study by analysts at Sphene Capital, the price target for Almonty Industries was raised from CAD 1.59 to CAD 2.13. The investment rating was, of course, confirmed as "Buy".

Hensoldt with a strong turnaround

Before the start of the war in Ukraine, arms companies were still regarded as "socially harmful" investments, but after the turnaround, they have mutated into one of the Germans' favourite investment objects. In addition to the German flagship Rheinmetall, which once again received an order worth millions for the delivery of state-of-the-art medical technology from Ukraine and was given a new price target of EUR 666 by the US investment bank Goldman Sachs, the order books of Hensoldt AG, which specializes in defense electronics and sensor solutions, are also full to bursting.

Since Russia's invasion of Ukraine in late February 2022, the Hensoldt share has gained around 200% to EUR 34.30. However, analysts at mwb research believe this advance is far from over. In their latest study, the experts gave the share a target price of EUR 44 and a "Buy" rating.

Given NATO's growing defense budgets and escalating geopolitical tensions, Hensoldt has significant growth potential. Germany and France, among other European countries, are stepping up efforts to modernize their defense capabilities, which promises long-term benefits, the analysts said. EU defense spending now exceeds that of the US, which would improve the profit outlook for Hensoldt.

In addition, the upcoming elections in NATO countries could further boost defense spending and thus significantly increase Hensoldt's sales. Hensoldt offers a compelling investment opportunity in the defense sector due to its attractive valuations and promising growth opportunities compared to its peers.

Vonovia - Real estate shares at a turning point?

The German real estate sector is in crisis. In addition to high inflation with rising commodity prices and the shortage of skilled construction workers, high loans for willing housebuilders have been a sticking point recently. However, with the possible lowering of key interest rates by the Fed, which could then be followed by the European Central Bank (ECB), hopes of lower interest rates and, thus, real estate financing are spreading. The sector could be on the verge of a sustainable turnaround.

Positive signals came from LEG Immobilien, whose management sees a revival in the transaction market, indicating that the devaluation cycle may be nearing an end. Analysts are also optimistic about Vonovia, Germany's leading housing company.

The analyst firm Warburg Research raised its target price for Vonovia from EUR 39.50 to EUR 40.20 with a "Buy" rating following the second quarter figures. The results have confirmed that the real estate company is doing well.

From a technical perspective, the Vonovia share is close to breaking the horizontal resistance level of EUR 30.21 at EUR 29.46. A sustained breach of this resistance would generate a price target in the region of EUR 37.98. A downward gap from April 2022 still needs to be closed at this level.

After the stock market earthquake last Monday, many share prices overreacted, creating attractive entry opportunities. The construction of the Sangdong mine is entering a critical phase at Almonty Industries. The crisis is coming to an end for real estate stocks such as Vonovia. Due to the turnaround, Hensoldt is benefiting from a further increase in orders.