Close menu

April 6th, 2022 | 10:08 CEST

K+S, Barsele Minerals, Shell - Which commodity stocks belong in the portfolio?

  • Gold
  • Commodities
  • Oil
Photo credits:

Commodity prices are rising in almost all areas. To blame everything on the Ukraine conflict is too short-sighted. Fertilizer prices have significantly increased in the past year due to crop failures caused by natural disasters. Oil prices also began to rise last year. However, the sanctions against Russia gave the oil price a further significant tailwind. Gold has only been able to increase with the outbreak of the Ukraine war and is currently quoted at between USD 1,900 and 2,000. The high inflation should further increase the demand for gold. Today we look at three companies from the three sectors and analyze their potential.

time to read: 4 minutes | Author: Armin Schulz
ISIN: K+S AG NA O.N. | DE000KSAG888 , BARSELE MINERALS | CA0688921083 , Shell PLC | GB00BP6MXD84

Table of contents:

    Bill Guy, Chairman, Theta Gold Mines Limited
    "[...] 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

    Full interview


    K+S - Share is overbought

    Already in 2021, the price of potash reached a new 13-year high. One of the reasons for these high prices is the sanctions against Belarus, or more precisely Belaruskali, which covered 20% of the world market before the sanctions. The Kassel-based fertilizer producer K+S has significantly benefited from this. While high debts and low margins were still squeezing the Group at the beginning of 2021, the steadily rising potash price has made the Company the top performer in the MDAX. If it wants to at least partially offset the loss of wheat exports from Russia and Ukraine, fertilizer is needed to boost the harvest.

    The annual financial statements presented on March 10 show just how well things went for the Kassel-based company in 2021. Sales climbed 32% to EUR 3.2 billion. EBITDA shot up 262% to EUR 969 million. With debt so high, the Group has restructured to cut costs. Debt was significantly reduced by selling the American salt business for USD 3.2 billion. The Group also intends to pay a dividend of EUR 0.20 again. According to management, the Company is targeting EBITDA of between EUR 1.6 and 1.9 billion this year.

    Since the beginning of the year, the share price has almost doubled again. The share is currently trading at EUR 28.51, just below the high for the year of EUR 30.07. The share is clearly overbought, but every minor setback is currently used to enter the market. Analysts are also slowly becoming more cautious about the share and advise holding rather than buying. Baader Bank has issued the latest buy recommendation with a price target of EUR 30.00. There does not seem to be much upside potential left at the moment.

    Barsele Minerals - Clearly undervalued

    Gold has served as a safe haven against inflation for decades. The breakout of the gold price helps gold producers to increase their earnings significantly. Barsele Minerals is a gold explorer that has not yet been able to benefit from the increased gold price. Yet the Barsele project, which is over 34,500 hectares in size, is located in politically secure Sweden in a mining region with cheap electricity, water, rail access and roads. As of 2019, there is a mineral resource estimate of 2.4 million ounces of gold under the NI 43-101 standard. The project is 45% owned by Barsele Minerals, with Agnico Eagle holding the other 55%.

    The Company wanted to buy Agnico Eagle's shares last year, but due to Corona issues, the project was put on hold for the time being. Negotiations on the acquisition of the project by Barsele Minerals continue in the background. The cooperation between the two parties remains for the time being, and in January, a gold discovery of 90.8 g/t gold was announced. Only 3km of the 8km long gold-bearing shear zone has been explored. Management plans to initiate another 30,000m drill program over the next 1.5 years and believes this will increase the mineral resource estimate to 3.5 million ounces of gold.

    Management believes in the project's success and has a 25% interest in the Company. 50% is in institutional hands, and 14.9% is in the hands of Agnico Eagle. The market capitalization is just 59 million Canadian dollars (CAD). If a value per ounce of gold in the ground of USD 200 is assumed, the total project has a value of USD 480 million or about CAD 600 million. The share of Barsele Minerals is, therefore, CAD 270 million. One can see how undervalued the project is at the moment. The large gold deposit and existing potential could tempt other gold producers into an acquisition. The share is currently trading at CAD 0.45, which is below the price of the last private placement of CAD 0.50.

    Shell - Good news operationally

    The oil price already climbed decently in 2021. But since the beginning of the year, oil has entered turbo mode, pushing WTI, for example, up to almost USD 130. The main reason for the price explosion is the Ukraine conflict and the associated sanctions against Russia. Shell is benefiting from the high energy prices. The Company will not continue its business in Russia in the future, and Shell service stations in Russia have also been closed. However, the high oil price will continue to boost the Group's earnings despite the Russia outage.

    Last year, adjusted earnings were USD 6.4 billion. Most recently, there has also been good news operationally. Working with Atlantic Shores, the Group won a tender for an offshore wind farm in the New York Bight. On March 29, it announced the start of production from a subsea project in the Gulf of Mexico. Peak production is 20,000 barrels of oil equivalent per day. In late March, the Colibri project in Trinidad and Tobago delivered gas for the first time. Peak production here is expected to be around 43,000 barrels of oil equivalent.

    Adding to all the good news is a USD 8.5 billion share buyback program and a 4% dividend increase. Analysts are all positive about the stock. The price targets range from EUR 25.46 to EUR 32.95. The Royal Bank of Canada has even included the Company's stock on its "Top 30 Global Ideas 2022" list. Currently, the share is trading at EUR 25.16. Even if oil is considered dirty, there will be no getting around black gold in the coming years.

    The producers of raw materials benefit significantly from the high prices. But the potentials are not always equally good. In the case of K+S, the share has risen sharply in the past year and continued the trend this year. Here, one should wait for a real setback. Barsele Minerals is currently significantly undervalued, which fuels takeover fantasies. Pay attention to the news here. Shell is currently earning a golden nose and can use this strong position to drive the transformation to a sustainable company.

    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.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.

    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

    Related comments:

    Commented by Fabian Lorenz on April 11th, 2024 | 07:00 CEST

    Out of defense, into gold!? Renk, Barrick Gold, Desert Gold

    • Mining
    • Gold
    • defense
    • armaments

    On Tuesday, German defense stocks were shaken briefly and sharply. In a flash crash, Renk, Rheinmetall and Hensoldt fell by more than 10%. This indicates that defense stocks have run hot. The future prospects for the companies are undeniably positive, but a consolidation is in order. Gold is an entirely different story. The price of the precious metal is at record levels, but the shares of gold producers are still a long way from their 2020 highs. This applies to the heavyweights like Barrick Gold and Endeavour Mining, but even more so to the explorers. One of the promising explorers is Desert Gold. The Company operates in an attractive region, is on the verge of becoming a Tier 1 mine producer, and is a takeover candidate. Barrick Gold is one of many companies that could make a move on Desert Gold.


    Commented by Stefan Feulner on April 9th, 2024 | 06:45 CEST

    Palantir, Globex Mining, Bayer - The trend is pointing upwards

    • Mining
    • Commodities
    • Gold
    • Silver
    • Pharma
    • Software

    After a successful first quarter of 2024, the DAX and Dow Jones took a well-deserved breather last week. In contrast, the precious metal markets for gold and silver continued their upward trend. Gold also reached new absolute highs of USD 2,354 per ounce. While gold producers such as Barrick Gold and Newmont remained in hibernation, they have been following the rising base price for several weeks now. There is currently also an opportunity for smaller commodity stocks to participate disproportionately in the upward trend.


    Commented by Stefan Feulner on April 8th, 2024 | 06:45 CEST

    Geopolitical uncertainties - Sibanye Stillwater, Saturn Oil + Gas and Barrick Gold benefit

    • Mining
    • Oil
    • Gold
    • Silver

    In addition to the stock markets, which reached new highs last week, the direction of precious metals and oil is also clearly pointing upward. While gold also reached a new all-time high, silver has significant catch-up potential compared to its big brother. In the case of black gold, the current uncertain geopolitical situation could cause oil prices to break through the USD 100 per barrel barrier once again.