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August 30th, 2021 | 11:22 CEST

Huge opportunities at Steinhoff, Saturn Oil + Gas, MorphoSys

  • Oil
Photo credits: pixabay.com

The second-quarter reporting season is drawing to a close and was exceptionally strong. Earnings estimates had already been raised in the run-up to the quarter and were even exceeded again due to the economic recovery following the disastrous Corona year 2020. Looking at the forecasts of most companies for the full year, these were also raised. As a result, some stocks are facing a revaluation that the broader market has yet to realize.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: STEINHOFF INT.HLDG.EO-_50 | NL0011375019 , SATURN OIL+GAS O.N. | CA80412L1076 , MORPHOSYS AG O.N. | DE0006632003

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] 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

    Full interview

     

    Saturn Oil & Gas in a new league

    Energy Company Saturn Oil & Gas set the stage for a revaluation on June 7, 2021, when it completed the transformative acquisition of light oil assets in the Oxbow area of southeastern Saskatchewan, one of the most economically viable oil plays in North America. With this move, the Canadians rose to become one of the region's leading petroleum producers.

    Production increased twentyfold

    Saturn Oil & Gas previously produced only 350 barrels of oil per day. With the acquisition, this will now be increased by a factor of TWENTY to up to 7,000 barrels per day. At the same time, by selling large parts of its oil production for the next four years, Saturn Oil & Gas ensured that the repayment of the loan plus debt service is fully secured until summer 2023. For the next three years, the Company also identified the potential to generate annual free cash flow by optimizing and re-completing more than 500 existing wells.

    Not perceived by the market

    The attractiveness of the deal is reflected in the valuation. Saturn Oil & Gas paid 1.4 times cash flow for only the approximately 280,000 net acres, equalling approximately CAD 14,000 per flowing BOE. Industry peers currently pay an average of about CAD 30,000 per flowing BOE. Despite the excellent prospects and the hedging income secured, the price of Saturn Oil & Gas remains at the level of the capital increase at CAD 0.12.

    Quarterly figures show potential

    With the publication of the figures for the second quarter, which will be released today after the close of trading, the fog is likely to lift, and for the first time, at least in part, revenues from the "new Saturn Oil & Gas" will emerge. The first revenues from the acquisition should be visible, and the figures should be dominated by the takeover, which should once again highlight the deal's potential.

    In addition to the announcement of the figures, the Company, led by CEO John Jeffrey, plans to hold a conference call on Tuesday at 18:00 CET. In addition, investor relations activities are likely to be significantly expanded as a result. Analyst research, increasingly from the North American area, is also planned, according to the Company. If it is confirmed that sales and margins will result in a price-earnings ratio of below 2 for 2022, then there should be an initial spark.

    Tension at boiling point

    While German-South African retailer Steinhoff continues to face uncertainty over the broader impact of the pandemic, the Company says trading conditions were encouraging in the third quarter as the effects of the pandemic waned. With the announcement of figures for the first nine months of the 2020/2021 fiscal year, hope continues to germinate for a revival of the struggling Company. Sales increased by 15%, from EUR 5.91 billion to EUR 6.81 billion.

    Things get really serious for Steinhoff on September 3 and 6. Here, votes are scheduled to decide on a settlement proposal in the amount of EUR 1.4 billion. In the wake of the encouraging figures, the share price rose to a high for the year of EUR 0.14. If the required majority approves the settlement, another short-term upward swing is likely. In the long term, however, the Group is still far from out of the woods.

    MorphoSys with sign of life

    The shares of MorphoSys have been badly shaken in recent weeks. With the announcement of conditional approval for the blood cancer drug tafasitamab (Minjuvi) in combination with the drug lenalidomide for a specific cancer problem, the turnaround could have been heralded for the biotech company. After bottoming out in the area of EUR 45, a breakout above the resistance level of EUR 50 would generate further price potential.


    Due to increases in forecasts or acquisitions, companies face revaluations that market participants partly fail to realize. In the case of Saturn Oil & Gas, the transformation into a major oil producer should become apparent in the upcoming quarterly figures. MorphoSys offers an attractive trading opportunity at the current level, while Steinhoff is a risky investment.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author



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