September 17th, 2021 | 12:16 CEST
LVMH, Diamcor, BYD - Consumption without limit
Table of contents:
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.
LVMH - Magnificent development
It is not for nothing that the shares of the industry leader LVMH, which holds rights to more than 75 different brands sold in approximately 5,000 stores in about 80 countries worldwide, have more than doubled since the beginning of 2020. The Paris-based Company's sales last year were EUR 44.7 billion, with profits of EUR 4.70 billion. Well-known brands such as Louis Vuitton, Moët & Chandon and Hennessy are part of the portfolio, as are Bulgari, Kenzo, Dior, TAG Heuer and even Dom Perignon.
The next figures are expected at the beginning of December. China is currently causing some problems for the luxury segment. In addition to the fear of the spread of the Delta variant in Asia, which is weighing on retail sales, the EU's plans to ban products from forced labor put pressure on prices in the textile and luxury goods industries. Especially in the fashion industry, there are repeated accusations that factories work under poor conditions. EU Commission President Ursula von der Leyen spoke of plans for an EU-wide ban on products from forced labor in her State of the EU address on Wednesday. Despite the current correction, nothing passes LVMH in this segment. In the area around EUR 620, the paper is worth buying.
Diamcor- Diamonds and girls
Already in the 4th century BC, the first precious stones were discovered on Indian soil. When discovered in the 13th century that diamonds could be worked, India rejected this approach because magical powers were attributed to the gemstone, which would thus have lost their effect. These times are over, at least since Marilyn Monroe. Hardly any prestigious object stands more for wealth and luxury than a piece of jewelry made of diamonds. The growing demand is also boosting the few companies listed on the stock exchange.
Diamcor Mining is an emerging Canadian mining company focused on identifying, acquiring and operating diamond projects that can be put into production in the near term and have the potential to generate continuous diamond production and cash flow. The share price of the Company, valued at EUR 14.36 million, tripled to CAD 0.35 within a few weeks in the second quarter, driven by excellent fundamentals. Since then, the share price has been consolidating at a high level in around CAD 0.30.
Currently, the Canadian Company is concentrating on expanding and further developing the Krone-Endora project, located directly next to the huge Venetia Mine of De Beers, the world's largest diamond producer and trader. The project covers approximately 5,900 hectares, but Diamcor is currently working on only 5% of this area.
Diamcor is thick in business with the world-famous New York Company Tiffany. The subsidiary Tiffany & Co. Canada has entered into a long-term strategic alliance with a right of first refusal on up to 100% of the future production of rough diamonds from the project at current prices. In connection with this right of first refusal, Tiffany & Co. Canada also provided the Company with financing to move the project forward quickly. Production started in July when the mining of 2,989.54 carats of diamonds generated revenues of CAD 744,085.
Recent news once again demonstrated the potential of the project. Diamcor was able to announce the completion of Phase 1 upgrades sooner than expected. The improvements, such as installing a new material handling step, expanding the diamond concentration system, and installing a new electronic X-ray unit for diamond recovery, can increase processing volumes by up to 100%. At current levels, Diamcor is a candidate for addition to the portfolio to participate in the increasing luxury trend.
BYD - Further strengthening of sales
BYD continues to strengthen its dealer network in the US. After recently announcing the expansion of its dealer network in New Hampshire, subsidiary BYD Material Handling is entering into an agreement with Material Handling Inc. to drive expansion in Tennessee. The US dealer plans to sell electric vehicles and related lithium-ion batteries and chargers.
BYD's stock came in down 4%, breaking through the critical support line at EUR 28. The next price target is now around EUR 25. Investors should currently rather stand on the sidelines.
The gap between rich and poor is widening. Due to the increase in millionaires, consumption in the luxury goods industry is also rising. LVMH is the absolute market leader here and worth buying in the long term. The diamond producer Diamcor is suitable as a portfolio addition. Investors should wait and see in the case of BYD.
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