February 4th, 2022 | 13:56 CET
Infineon, MAS Gold, E.ON - Inflation and supply bottlenecks cause rising prices
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Infineon - Very good quarterly figures
The supply of chips still cannot keep up with the high demand. This, of course, benefits Infineon, which can't produce fast enough. Only last September was the group able to open a new factory in Austria, where power semiconductors for electric vehicles, renewable energies and data centers can be produced. Revenues in the semiconductor industry grew by 25% on average in 2021. As a result, revenues could exceed USD 500 billion for the first time.
The first quarterly figures released by the Company on February 3 show how well business is going in the chip industry. Compared to the same quarter last year, sales increased by 20% to EUR 3.159 billion. Profit was EUR 717 million, which corresponds to a margin of about 22.7%. That was well above analysts' expectations. At the same time, the forecast for the current year was raised. CEO Dr. Ploss said, "Infineon has made a successful start to the 2022 fiscal year. ... Demand for our products and solutions remains very high."
The stock reacted to the excellent numbers with a "sell on good news." One reason is investors' fear of tight supply situations in some application areas. If there are failures there, Infineon can no longer produce as planned. The share is currently trading at EUR 35.19 and should not make any prices below EUR 33.96 on a closing price basis in order not to endanger the overriding upward trend. Goldman Sachs and UBS have set the share to Buy after the report.
MAS Gold - Further land acquisition in sight
Investors have always liked to invest in gold to protect their money from inflation. Gold companies come into play if one does not want to resort to physical gold shares. MAS Gold is a gold explorer slowly but surely approaching 1 million ounces of gold. The focus is on the La Ronge Greenstone Belt in Saskatchewan. There, the Company owns several projects where NI43-101 gold has already been proven. In recent months, further projects have been taken over, which consistently expand the business model of satellite deposits. A processing plant for the various gold deposits is to be built centrally.
In December, the Company was able to issue 2 updates of their mineral resource estimate. The Greywacke North project has 101,000 indicated and 55,000 inferred ounces of gold. The North Lake project comes to an inferred 494,000 ounces of gold. In addition, a cooperation agreement was signed with Eros Resources (Eros), which is funding exploration work in the amount of CAD 3.5 million. In return, Eros will receive a 17.5% interest in the Preview-North, Greywacke Lake, Elizabeth Lake and Henry Lake properties. There is an option for Eros to also acquire 17.5% of Contact Lake. On January 17, the Company was pleased to announce an agreement to acquire the Preview WS project in exchange for 30 million MAS Gold shares from Comstock. The transaction is subject to approval by Comstock shareholders, which is expected in late March.
On January 20, the start of the drilling program was announced, which will explore the North Lake, Point, and Preview SW projects. A total of 8,000 meters of drilling are planned. In doing so, an attempt will be made to expand the known deposits. The CEO believes that with the completion of the Comstock transaction, the target of 1 million ounces of gold is within reach. He said, "With the closing of this deal in the first quarter of 2022, MAS will move closer to its milestone of having an estimated 1,000,000 ounces of gold resources in its possession." Since July, the stock has been in a sideways trend between CAD 0.095 and CAD 0.12 and is currently trading at CAD 0.105. If drilling results are good, the share can attack last year's high of CAD 0.25 again.
E.ON - Board members buy shares
While a megawatt hour of electricity cost around EUR 44 in December 2020, the highest price in December 2021 was EUR 620 per megawatt hour. In some cases, electricity suppliers were no longer able to submit offers at all, and if they did, at incredibly high prices. At the end of January, the megawatt hour was still a good EUR 165, and for the time being, prices are unlikely to fall. Electricity companies like E.ON are profiting from the high prices and can use the additional revenue to push ahead with their goal of green sustainable energy.
In times of uncertainty on the stock market, E.ON shares are readily bought as utility stocks. The green energy business is being expanded, and most recently, the Essen-based energy group took a stake in Norwegian supplier Horisont Energi. The common goal is the production of clean hydrogen and ammonia. E.ON is acquiring 25% of the shares in the Norwegian Company. Opinions are divided on whether the deal will ultimately pay off for the group because the Norwegians are burning a lot of money and have a turnover of just USD 1 million. In the long term, the expansion of the green energy business will pay off for the group.
The stock has been in an uptrend since the beginning of March 2021. Currently, the stock is trading at EUR 12.47 and is on the verge of a new multi-year high. The management is convinced of the share; CEO Birnbaum bought shares in January for almost EUR 300,000 at an average of EUR 11.88. Victoria Ossadnik, another member of the Executive Board, took the plunge and invested around EUR 100,000 at a price of EUR 12.03. The dividend yield is to be maintained at around 5%. For dividend hunters, this is a buying argument.
All three companies have good times ahead. They profit from rising prices. Infineon cannot produce as much as it can sell. MAS Gold offers inflation protection and an early entry into an emerging gold company. At E.ON, investors can also use the dividend as inflation protection.
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.
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