July 12th, 2023 | 08:20 CEST
Multipliers in the shadow of the hydrogen hype? ThyssenKrupp Nucera, TUI, Desert Gold Ventures
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"[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources
ThyssenKrupp Nucera: Flying blind into fortune?
A successful IPO - that is the verdict on the ThyssenKrupp Nucera IPO. The Company has retained its two most important anchor shareholders and acquired further supporting pillars in the form of professional investors and funds. Many investors believe ThyssenKrupp Nucera can profit from the hydrogen hype. This is understandable given the business to date - after all, ThyssenKrupp Nucera is already known for the production of green ammonia. The two processes are similar, which is one reason why investors have confidence in the new hydrogen stock on the stock exchange floor. However, is it currently worth investing in?
ThyssenKrupp Nucera's stock gained around 25% within a few days of its stock market debut and has since come back a little. Volatility is likely to remain high in the coming days. The reason: the market first needs to get a feel for the stock. Analysts' forecasts and outlooks, as well as general market expectations, must first be reflected in prices over a certain period of time in order to serve as a guide. Until then, the stock is likely to be a plaything of emotions. As soon as the first analysts have issued their assessments of ThyssenKrupp Nucera and the chart has also formed a valuation corridor, investors will see more clearly. However, this does not mean that hydrogen is not currently an exciting investment topic. Better opportunities may arise with other stocks that are less in focus compared to Nucera.
TUI: Candidate for the Watchlist
TUI is also currently in focus. However, this is not so much because the share is a success story but because the travel season has begun. After the pandemic, people are finally taking carefree vacations again. But the price shock is also likely to have an impact on the travel industry. It is not uncommon for a family vacation to cost double today compared to 2019. To what extent this will affect TUI's figures remains unclear. Although TUI itself already stated a positive development in booking figures in May, it will likely not be clear until late summer where the journey is heading for TUI's share. Although the share price has risen recently, it is still under the radar. However, the share is one for the watchlist and could be good for a comeback this summer.
Desert Gold: Mini valuation, max opportunity
A comeback is also on the horizon for Desert Gold shares - even though the stock is still not far from its lows for the year. Desert Gold is advancing its SMSZ property in Mali, where it is exploring for gold. The project is 440 sq km in size and is located in a gold belt where Barrick Gold, B2Gold and Allied Gold are also active. The SMSZ project offers a resource estimate of over 1.1 million ounces of gold and numerous opportunities to identify new gold deposits. It is not uncommon for illegal mining of gold by local residents to lead Desert Gold geologists to new promising areas, which are then professionally explored. During past drill programs, Desert Gold achieved all drill targets and stayed within the planned budget. With all of its neighbours being extremely low-cost, with production costs of around USD 800, Desert Gold's stock is increasingly coming into focus. The Company is currently valued at only CAD 11.6 million - given the prospects and the many years of on-site team experience, this is a low value.
Desert Gold is also interesting because neighboring projects are increasingly getting a price tag. "So the region is highly interesting and possibly facing further consolidations. Back in late 2022, the Moroccan Managem Group struck at IAMGold. They bought their exploration projects in the tri-border area of Senegal, Mali and Guinea, which are also located in the Senegal-Mali Shear Zone (SMSZ). Resident Barrick Gold and B2Gold have been abundantly inactive in recent months but have full coffers. With declining remaining mine life spans, new properties are needed to maintain production over the medium term,"** stated the research portal researchanalyst.com in March. Desert Gold must be considered a speculative stock, but the general conditions are good. Only recently, the Company won Doug Engdahl, an experienced geologist and founder of the mining service provider Axiom Group, for its management team.
In order to make speculative bets this summer, investors do not have to rely on the omnipresent hydrogen theme. Many other sectors outside the media's focus have comeback potential. In addition to the beleaguered TUI share, these could include gold stocks, which could benefit from an approaching end of the interest rate hike cycle in the US. Representatives of the sector, such as Desert Gold, are also undervalued and chart-wise at a low point. Those who like to invest speculatively should put both stocks on their watchlist and get a foot in the door if necessary.
Conflict of interest
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