03. September 2021 | 10:39 CET
Desert Gold, MorphoSys, TUI - Are there game-changers in these stocks?
When the stock market has already made a decent run, many investors search for laggards or game-changers. In the case of the so-called laggards, 90% of the reasons why the stock is not performing are fundamental, usually due to complicated or low-margin business models or simply a wrong management approach. The temptation is great to buy charts at the bottom right of the screen according to the motto: "Now the downward trend is over!". This view is unfortunately 90% wrong because the stock market is trend and momentum-driven. So what remains is to try to find so-called "game-changer" stocks. Here, the entire situation changes fundamentally due to an event, and the trend often turns with an initial price jump.
time to read:
ISIN: MORPHOSYS AG O.N. | DE0006632003 , DESERT GOLD VENTURES | CA25039N4084 , TUI AG NA O.N. | DE000TUAG000
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
MorphoSys - Turnaround despite leaving the STOXX 600?
The German biotechnology Company MorphoSys loses its place in the broad European index STOXX 600. The index operator Qontigo thus acknowledges the very weak share price performance in the year to date, which has had a correspondingly negative impact on the important index criterion of the market capitalization. Since the beginning of the year, the share has fallen by around 46%, reducing the stock market value from around EUR 5.3 billion to EUR 1.6 billion.
With the acquisition of Constellation, the management wanted to set a fundamental course that should pay off strongly in the future. Many investors were betting on this game-changer and were overwhelmed by the poorer operating figures. In mid-July, the acquisition of Constellation was completed, and the share price subsequently slumped by a further 25%. The updated sales guidance now primarily reflects the reduced planning for Monjuvi product sales. MorphoSys put USD 1.7 billion on the table for this product. From today's perspective, the only hope is that the rest of the pipeline will perform well.
Despite the various criticisms, the share price has steadily worked its way upwards in recent days. The important chart hurdle around the EUR 50 mark must be sustainably overcome for the bulls, and a potential trend reversal scenario must be triggered. Should this still happen soon, price targets of EUR 57 to 64 are on the cards. Keep watch!
Desert Gold Ventures - Golden acquisition with potential
Desert Gold Ventures is a Canadian gold exploration and development company focused on deposits in the African state of Mali. The Canadians' flagship project is the SMSZ project (Senegal Mali Shear Zone). With around 410 square kilometers, it is one of the largest exploration projects in West Africa. In the immediate vicinity, companies such as B2Gold, Barrick Gold, and Allied Gold are prospecting; the whole zone is a world-class area for gold. Now a significant property is added - it is called Kolomba.
For Desert Gold, this step is great news! Because the acquisition of the immediately adjacent concession opens up another exploration area of 30.6 square kilometers in size. After processing 20 gold zones on the SMSZ area, the assumption is now rising that the entire region has much more potential than previously believed.
The Kolomba land intercept is two additional gold zones. It already has drill intercepts of up to 16.03 g/t gold over 7 meters, 7.78 g/t gold over 19 meters and 3.51 g/t gold over 29 meters in the Linguekoto West zone and 2.04 g/t gold over 41 meters, 20.87 g/t gold over 6 meters and 1.40 g/t gold over 55 meters in the Mogoyafara South zone. The last exploration activities took place on the property in 2003 when gold prices were below USD 400 per ounce. Today, economic assessments are taking place at an expected gold price of USD 1,750. However, gold can also settle above USD 2,500 very quickly due to inflationary pressures.
The first batch of drill results from 2021 are expected from the ancestral area of the Barani East deposit, subject to the timing of re-analysis of selected samples. Current preliminary engineering and geological work should allow exploration in the Kolomba area as early as the first quarter of 2022.
Overall, the Kolomba area's acquisition significantly raises the Desert Projects' profile once again, as historical activities have already delivered advanced results. Due to the high level of attention and the dense settlement of majors, the Desert Gold share price can abruptly increase due to takeover activities.
TUI - The summer is drawing to a close
At TUI, hopes were focused on a turnaround in tourism through a strong vaccination rate and a corresponding decline in the risk situation. The bad weather in Germany has exploded the bookings accordingly and even led to overbookings. However, new feared corona waves could now lead to an opposite trend in the fall and winter. Thus, the chart of the TUI share also resembles the reciprocal incidence values in Germany. With a low of 5.1 in incidence, a temporary high in the TUI chart was set at EUR 5.2. Now the cards are being reshuffled, with rising incidence figures, the price has fallen back to EUR 3.6.
Hope rests on the business in the fall after the RKI's Spain warning. Operationally, the recent announcement of short-time work and a wide range of other cost-cutting measures means that liquidity is being strictly conserved. After all, according to an analysis by the Good Business Pays campaign, TUI ended up as the third most delinquent payer in England, just behind lesser-known companies Meggitt and C&C Group. That is unflattering and a sign of extreme tightness when it comes to payment availability. Or it is simply a sign that Corona will continue to harm the balance sheets of tour operators for a long time to come.
For TUI and the industry's future, science and medicine must get a grip on the virus in the medium term. Ultimately, however, this will only succeed if politicians recognize that Corona, like all other influenzas, is now part of our lives and does not deserve permanent special treatment. Then companies will be able to make profits again! TUI shares, therefore, remain a game-changer speculation in the pandemic.
The search for possible turnaround points is sometimes laborious and based on many parameters. While chart analysis provides clues, one cannot ignore key fundamentals. MorphoSys and TUI are under challenging phases. At Desert Gold, the traffic light has just turned green.