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March 22nd, 2021 | 08:40 CET

K+S, Goldseek Resources, Gazprom - those who wait for others to buy will lose out

  • Gold
Photo credits: pixabay.com

Almost 70 years ago, economist Harry Markowitz published an article on how best to build an investment portfolio. At its core, it was about the benefits of diversification. By spreading risk across as many asset classes as possible, positive effects could be achieved, all the more so if the assets had a low correlation, i.e. if the returns developed as independently of each other as possible. His findings became an important part of portfolio theory. Markowitz was later awarded the Nobel Prize for his research. Unfortunately, the intuitively conclusive recommendation for action loses its "theoretical" advantages in crash phases since correlations and liquidity, as proven in several studies, change abruptly to the investor's disadvantage. Nevertheless, diversification makes sense and investors should not "put all their eggs in just one basket." Below we will give you a few ideas on how to build a portfolio of commodity stocks that are well diversified and rich in opportunities.

time to read: 4 minutes | Author: Carsten Mainitz
ISIN: DE000KSAG888 , CA38150J1066 , US3682872078

Table of contents:


    K+S AG - positive news currently fizzling out

    There was justified hope that the K+S share price could crack the EUR 10 mark in recent weeks. This was because the worrying news that had previously been in the air, namely that BaFin had commissioned a special audit of the balance sheet, turned out to be only half as bad. The auditor Deloitte issued an unqualified opinion for the consolidated financial statements, which also waved through the previously questioned write-down plausibility. But the news that the special write-down in question was around EUR 140 million lower than announced, at EUR 1.86 billion, did not excite investors. The significantly upwardly revised growth estimate of the German Chemical Industry Association (VCI) for the industry in the current year in the middle of the month also failed to give the share price any positive impetus. The association now expects companies in the chemical-pharmaceutical industry to grow by 3% in the current year. In December, the estimate was still a meager 1.5%.

    Do all good things come in threes? Unfortunately, this does not apply here; the market was not interested in the third positive announcement last Monday either. The Group wants to expand the production capacity of its potash plant in Zielitz near Magdeburg. K+S will invest about EUR 30 million for this purpose. The new production plant for high-purity potassium chloride, which plays a significant role in the industrial production of detergents, paints, plastics, textiles and other products for everyday use, will start operations in early 2023.

    The majority of analysts currently rate the share as "hold" with a target price of EUR 8.60. It is also roughly the level at which the stock exited trading last Friday. A few experts believe that the Company, which is currently valued at EUR 1.6 billion, is worth more. UBS and Baader see the fair value per share at EUR 10.10 and EUR 11, respectively.

    GOLDSEEK RESOURCES INC - Go for it

    With Goldseek Resources' shares, investors have the unusual opportunity to profit from a promising company virtually from the outset. The Canadian gold explorer has been listed for just one year and is fully funded for its 2021 drill programs. Management and insiders have "skin in the game" and hold 61% of the share certificates. It's not just the assembled competent team that makes the Company promising; it is the strategy being pursued.

    Goldseek Resources owns five properties. Four of them are located in Québec, one in Ontario. In early March, the Company announced it had entered into an option agreement to acquire the entire Beschefer project from Wallbridge Mining. If the option is exercised, this would be the sixth project in the portfolio. Before the end of the first quarter, Canadians expect news from ongoing drilling programs and project developments of up to four properties. The Canadians' acquisition strategy is clever. The acquired projects are all located in areas where gold mines exist and gold producers have already done enough preliminary work. This approach significantly increases the probability of success in terms of raw material discoveries. The likelihood that a major will take over the project in question or the entire Company increases enormously.

    Canada is the fifth-largest gold producer in the world. About 2/3 of the mined gold comes from Québec (34%) and Ontario (42%). These facts underline that Goldseek Resources has positioned itself correctly and that it is right to strengthen itself in Ontario. Prominent neighbors such as Barrick Gold, Wallbridge Mining, Osisko Mining and Bonterra Resources should make investors feel good. With extensive upcoming newsflow, the share price of the Company, which is fully financed for 2021, should soon be significantly higher. Goldseek Resources is currently valued at just CAD 9 million. Investors should buy.

    GAZPROM PJSC ADR - A political pawn or a beneficiary of the hydrogen megatrend?

    Gazprom is the world's largest producer of natural gas. The Moscow-based Company controls the Russian pipeline network for natural gas and has a de facto monopoly. The Russian state is the largest shareholder with just over half of the shares.

    For some time now, the German-Russian Nord Stream 2 gas pipeline in the Baltic Sea has been a political issue. It is a thorn in the United States side, which sees Europe's energy independence in jeopardy. Anyone who thinks that the US has its interests and is looking for sales markets for liquefied gas is mistaken. The new US government is also putting on the pressure. Last week, our friends from overseas called on all companies involved in the project to pull out and threatened them with sanctions.

    Gazprom has an undisputed dominant market position. The issue of politics weighs on the stock here and there. Investors should use price setbacks in connection with the saber-rattling around Nord Stream 2 to build up positions. But perhaps it will soon be the "trending topic" of hydrogen that will boost the stock. That would only be logical since hydrogen can be produced from natural gas. According to a Company announcement on March 18, the Group is examining the production and use of hydrogen and export deliveries of hydrogen and methane-hydrogen mixtures using the existing gas infrastructure to various interested parties. The background to this is the increasing importance of hydrogen in the energy mix of several countries.


    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

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



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