May 24th, 2022 | 10:20 CEST
Monkeypox: risks and opportunities - Bavarian Nordic, Desert Gold, Varta
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"[...] We can make a big increase in value with little capital. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
Bavarian Nordic: Hope for the vaccine manufacturer
Bavarian Nordic's stock has been in demand on the market for days. The German-Danish company offers a smallpox vaccine. As evaluated by recognized experts, such as Moutih Rafei, the head of research and development at the biotech company Defence Therapeutics, classical vaccines also offer protection against monkeypox. "Anyone vaccinated against classical smallpox as a child has good protection against monkeypox. I would talk about 80 to 85% immunity. Unfortunately, vaccination rates are low these days," Rafei said. So a business with classic vaccines like Bavarian Nordic's could pick up again. In recent years, the uptake of smallpox vaccination has dropped significantly - so the population is less immune than one might think. Even if authorities remain relaxed about monkeypox, the uptake of smallpox vaccination could pick up again. Many people have become amateur virologists in recent months and take infections very seriously- even beyond recommendations.
As the Bavarian Nordic share has fallen significantly in recent months and is still trading below its highs for the year at the beginning of the week, the monkeypox fantasy could carry the value even further upwards. However, after such a sharp rise within a short period of time, the stock is a hot potato. The value undoubtedly has momentum but remains reserved for experienced traders.
Desert Gold: Everything according to plan
Things are a bit calmer with the Desert Gold share. The Canadian company is exploring the SMSZ property in Mali on the border with Senegal. Earlier this year, the Company released a resource estimate. In a more positive environment, more than 1 million ounces of gold might have boosted the share price significantly. However, the great euphoria failed to materialize. However, CEO Jared Scharf believes his company is still on track. In a presentation followed by a Q&A session at the International Investment Forum (IIF), the CEO was optimistic. The video will appear on the IIF's YouTube channel in the coming days.
The stock has lost about 45% of its value in the past year. This development is likely due almost entirely to uncertain market sentiment. Another factor could be Desert Gold's characteristic as a growth company. Currently, the market's appetite for growth stocks is somewhat limited. However, this market phase may also offer an opportunity for anticyclical investors. Gold, in particular, always has the potential to pick up speed even during a crisis. Since Desert Gold has the precious metal in the ground and first has to mine it, the stock is valued at a discount to the gold price and carries a kind of leverage: If the sentiment brightens, investors switch from "saddened to death" to "euphoric". This can quickly lead to a trend reversal for market-sensitive stocks such as Desert Gold. Nevertheless, the stock remains speculative. Although investors do not have to chase the price, there is a certain risk associated with the share. Desert Gold is certainly worth a look.
Varta: Better safe than sorry!
The Varta share is currently also of interest to many investors. The battery specialist has been sparking e-car enthusiasm for around a year. But here, too, sentiment is weighing on the share price. After the euphoria of 2020 and 2021, pessimism now prevails. Many investors doubt whether the start of the e-car business can be as successful for Varta as, for example, the button cells for hearing aids, for which the Company is so popular. Although the share is recovering, an initial turnaround is not expected until prices exceed EUR 80. Remain cautious here!
High-flyers, growth stocks that have fallen out of fashion, or commodity stocks that are popular within the scene - the market is currently showing its moody side. Even hot investment topics like monkeypox can bring short-term losses. Investors should therefore keep a cool head and invest according to their strategy. That includes a balanced asset allocation as well as risk management. The current market also offers opportunities - investors should try to make the best of the situation.
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.
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