Close menu

April 11th, 2022 | 19:03 CEST

K+S, Edgemont Gold, NIO - Shares as protection against demonetization

  • Gold
  • Inflation
Photo credits:

Inflation rates have been rising steadily since the end of 2020. What was initially declared by central bankers as a temporary event is becoming a permanent problem for society and the economy. The loose monetary policy, the shortage of raw materials, and the blown-up supply chains were responsible for the fact that the inflation rate in the USA was 7.9% in March, the highest since 1982. As a result of the sanctions imposed on Russia, the supply of raw materials and oil and gas is becoming even tighter, causing prices to shoot up once again. Investors can protect themselves by investing in producers of scarce commodities. In addition, for diversification, gold should not be missing in any portfolio as protection against currency devaluation.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: K+S AG NA O.N. | DE000KSAG888 , EDGEMONT GOLD CORP. O.N. | CA28008L1067 , NIO INC.A S.ADR DL-_00025 | US62914V1061

Table of contents:

    Nick Luksha, President, Prospect Ridge Resources
    "[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources

    Full interview


    Edgemont Gold - Attractive after the setback

    Investors who have held the Edgemont Gold share in their portfolio for some time may have thought to themselves: "Back on track". Since December 2020, the Company, which currently has a market capitalization of just EUR 1.61 million, has more than tripled in value from EUR 0.06 to EUR 0.21. However, recently released assay results from its latest Phase 1 drill program at the Dungate copper-gold porphyry project spooked investors so much that the stock plunged more than 70%. Strange, because CEO Stuart Rogers expressed enthusiasm for "the assay results at hand" and firmly expects to "finalize the drill plan and begin the Phase II drill program next month."

    As mentioned earlier, Edgemont Gold's focus is on the Dungate copper-gold volcanic project. It is located 6km southeast of central Houston in the Canadian Pacific Province of British Columbia. The mining area is also home to Imperial Metals' historic Equity Silver Mine and the Huckleberry Mine. Having acquired an interest in its first claims at Dungate in 2018, the Company now owns five properties covering 1,582 hectares that are drivable and explorable year-round. Given the sharp drop in the share price and the optimistic statements of the Company's leader, the correction may have been an exaggeration. With good results in the Phase II drilling program, this could be put into perspective again.

    Next breakout for K+S

    Things are going like clockwork for potash producers. After a brief correction below the EUR 25 mark, last week saw a bullish reversal and a breakout above the high for the year to date of EUR 30.07. The Kassel shares went into the weekend with a plus of 9.52% and a closing level of EUR 32.45. The reason for the increase was, on the one hand, positive analyst opinions; on the other hand, further short covering may have pulverized the gains once again.

    Analyst Chetan Udeshi from JPMorgan was positive about the European potash producer. The massive supply problems with fertilizers following sanctions against Russia would lead to a veritable explosion in earnings for K+S. The Kassel-based group would also benefit from high energy prices in the overall good agar environment. The investment recommendation was upgraded from "underweight" to "overweight". The price target was raised from previously EUR 12.50 to EUR 44.50, which still means a potential of almost 40% calculated on the current price.

    Indeed, the MDAX-listed Company is planning to achieve record results in the current year. Operating earnings EBITDA should be between EUR 1.6 billion and EUR 1.9 billion, which would mean the best result since K+S AG was founded. Against this backdrop, adjusted free cash flow should also rise sharply to between EUR 600 million and EUR 800 million. Despite the analysts' optimistic statements, the chart is already forming a flagpole, and the indicators are also massively overbought. Jumping on the current bandwagon could be very painful. The next resistance is already at EUR 33.46. In contrast, the price opened a gap on Friday, which is likely to close at EUR 29.83.

    NIO with production stop

    The chart picture for Chinese electric car manufacturer NIO looks much more negative. After highs of USD 66.99 in January 2021, a steep correction set in, which led to a low of USD 13.01 in mid-March. Since then, the value recovered to resistance at around USD 24 but then turned downwards again. Currently, NIO is struggling with the critical mark at USD 20. A break of the prominent resistance area would result in a retest of the low for the year.

    The fundamental situation is reflected in the chart. The Chinese company announced that it has suspended production due to supply chain failures in the wake of the Corona Crisis. "Since March, the Company's suppliers in several locations, including Jilin, Shanghai and Jiangsu, have suspended production one after another for reasons related to the epidemic and have yet to recover," the Company announced on its mobile app. The Company will postpone the delivery of e-vehicles to users and work with suppliers to resume production while complying with the government's COVID restrictions, the message said. Given the risky situation, it is currently advisable not to invest.

    Inflation remains longer than expected, on the contrary. Due to the conflict in Ukraine and the proclaimed sanctions against Russia, the supply of fertilizers is further tightened. K+S is benefiting but is already in overbought territory at the moment. NIO has to bow to the Corona pandemic and is currently stopping production. Edgemont Gold could be an alternative after the setback as a speculative addition to the gold portfolio.

    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

    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

    Related comments:

    Commented by Fabian Lorenz on July 16th, 2024 | 07:15 CEST

    Next share price jump? TUI, Aixtron, and Desert Gold

    • Mining
    • Gold
    • Travel
    • Technology

    Is the Aixtron share about to make its next leap? The shock of the profit warning was digested with a rise of over 10%. Three analysts recommend the share as a "Buy". Desert Gold is also ripe for a new rally. After more than doubling in a short space of time at the beginning of the year, it consolidated textbook style. Will it soon jump to a new yearly high? The Company is certainly not expensive, and experts consider a gold price of USD 3,000 possible. Important drilling results are also on the horizon. TUI is currently performing well operationally. The summer season business is booming, and the bankruptcy of a competitor is providing additional momentum. Nevertheless, the share is trending sideways. Could the purchase of an island be the trigger?


    Commented by André Will-Laudien on July 11th, 2024 | 06:45 CEST

    Mega rally on the cards - 500% plus is likely too low an estimate! Evotec, Desert Gold, Cogia, VCI Global, and Lufthansa

    • Mining
    • Gold
    • Commodities
    • Biotechnology
    • airline

    The stock market keeps rising and rising - this much is revealed by the ever-new highs of prominent indices such as the NASDAQ 100, S&P 500, or the Nikkei index. However, a closer look reveals some inconsistencies. For example, only 6% of all traded stocks are currently reaching new highs, while over 70% of all listed stocks have fallen since the beginning of the year. In short, global liquidity is aggregated in just a few blockbuster stocks, with the rest being left behind. Such bubbles already occurred in 1999, 2007, and 2015, followed by a 25% to 50% correction. When exactly this will happen, no one knows, but the party is likely to continue for a while due to high liquidity. Gold and silver are in the process of forming interesting breakout formations. Now is the time to pick the cherries!


    Commented by Juliane Zielonka on July 4th, 2024 | 07:30 CEST

    Innovation meets tradition: How Mercedes-Benz Group, Desert Gold, and Amazon are shaping the future

    • Mining
    • Gold
    • Commodities
    • Electromobility
    • Retail

    The global economy is facing a variety of challenges and opportunities. While vehicle manufacturers such as Mercedes are adapting their strategies, new opportunities are opening up in other sectors. Mercedes is expanding the combustion engine range of its S-Class and offering models with both a petrol engine and an electric battery. The German Association of the Automotive Industry is concerned about the EU's punitive tariffs on Chinese electric vehicle imports. It predicts that the impending trade conflict will intensify, particularly with regard to rare earth metals. In these uncertain times, it is all the more important to add some gold to the portfolio as a hedge. One candidate with high growth potential is the exploration company Desert Gold, which is investigating an outstanding area with over 1 million ounces of gold resources in Mali, Africa. Those who prefer data to new gold will be pleased with Amazon's latest strategic move. The Seattle-based company has not only brought on board a smart AI leader but also the entire team along with AI. Where is an investment worthwhile?