18. June 2021 | 12:33 CET
Kodiak Copper, Deutsche Telekom, Varta - What is going on in commodities?
The hype around wood lasted until May 25, after which the rally ended and the price consolidated by a whopping 40%. Gold was trading above USD 1,900 last week. In parallel to this article's writing, the price is below USD 1,800. A minus of about 5.5% within five days, and the industrial metal for electrification and copper, dropped by 8%. Currently, all factors speak for a further increase in commodity prices. Real interest rates are still negative, and inflation should also remain high. The Fed could not help calm the markets, although interest rate hikes were not announced until 2023. However, the Fed intends to continue its bond purchases. Consolidation can always occur after strong increases, and so we will see long-term rising commodity prices, especially for precious metals and copper.
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ISIN: CA50012K1066 , US2515661054 , DE000A0TGJ55
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Kodiak Copper - Exploration accelerated by 2nd drill rig
The MPD project covers 14,716 hectares since the Axe acquisition. Exploration drilling has been underway here since March this year to reach the 30,000m target. Currently, work is underway on the promising Gate Zone. On May 11, the Company issued an update on the drilling program. A total of 6 holes totaling 3,711m have been completed. Drilling indicates that 75m north and 125m south of the last holes also contain promising copper anomalies.
On June 17, the Company announced the deployment of a second drill rig to move forward more quickly with exploration. CEO Claudia Tornquist expects initial drill sample results in a few weeks. The flow of information is likely to continue in the coming months. Once the main work in the Gate Zone is done, the next step is to deploy a drill rig in the Dillard Zone. This zone has similar geology to the Gate Zone, offering further potential for the MPD project.
After my last article on Kodiak Copper, the stock rallied nearly 60% to CAD 2.34. Since then, the copper price has consolidated, and so has the stock, which is currently priced at around CAD 1.90. Due to the upcoming news, you can now buy shares, just in case you missed the first entry. It is going to be an exciting few months at Kodiak Copper.
Varta - The battery specialist with a dividend
Varta has been working on a high-performance lithium-ion cell called V4Drive, and not just since the German carmakers went on the offensive with e-mobility. It was announced back at the end of March, and there is now the first German premium car manufacturer that could be won as a customer. No wonder, because the technical data speaks for itself, the charging time is only 7 minutes.
Rumor has it that Apple is also in talks with Varta, as Apple is trying to bring an autonomous car to market. A battery that can be charged quickly would, of course, be an advantage. However, it must be noted that pilot production of the battery is not scheduled to start until the end of the year. If this is successful and the Company finds other large partners, the potential would be enormous.
The share formed a double bottom on May 12 and has constantly been rising since then. Therefore, yesterday's Annual General Meeting should have been relatively calm, especially as a dividend of EUR 2.48 per share is to be distributed to shareholders. The resistances at EUR 136.90 and EUR 138.50 were successfully overcome. The next target is EUR 145.50. Currently, however, we would wait for a setback to get in.
Deutsche Telekom - Breakout successful
Business at Deutsche Telekom is going well, with revenue up 32.3% in the first quarter. However, the result includes the acquisition of Sprint; otherwise, revenue would have only grown by about 7%. And that brings us to the only bad news - it has been announced that a shareholder of T-Mobile US has filed a lawsuit against the merger. It accuses the board of directors of not renegotiating the merger, even though SoftBank would have been under pressure because of other business cases.
The stock does not care much, and Deutsche Telekom's management also wants to continue the growth story and further expand its stake in T-Mobile US. No wonder, since the subsidiary currently generates 60% of the Company's profits. But business is also going well within Germany. Management's target is to increase Group revenue by 1 to 2% per year and adjusted EBITDA by as much as 3 to 5%. A dividend of at least EUR 0.60 is to be paid, but it can also be more if the results are good.
Since the share has overcome the resistance at EUR 15.50, it has been on an upward trend. The next resistance is EUR 18; if this is broken, the share has room to move up to EUR 19.30. Investors should be wary of a pullback here. As an investor, you should wait for a setback to get in and then participate in the excellent dividend yield.