RAW MATERIALS and DEFENSE! Sell Hensoldt? Buy Deutz and Globex Mining shares?

Globex Mining: Benefiting from the gold and commodity boom

Globex Mining shares currently offer an interesting entry opportunity. Like the price of gold, the mining incubator's share price is currently consolidating. However, it could quickly rise again, as it did at the end of 2024. At that time, Globex shares rose by almost 50% to CAD 1.58 within four months. The share price currently stands at CAD 1.33. The chances of a renewed rally for the debt-free company are good, as it is not only benefiting from the gold boom, but also plays a role in critical raw materials and thus benefits from the power struggle between China and the US.

Globex has a broadly diversified portfolio in the raw materials universe. The more than 250 projects in North America - about half of which are in the precious metals sector (gold, silver, platinum, and palladium) - allow for risk reduction. Globex does not finance the exploration itself, but instead makes the properties available to others. In return, it receives stock options and royalty payments, among other things. This enables the Company to continuously buy back its own shares, which should help to stabilize the share price.

In addition to precious metals, the Company is also active in rare earths, lithium, and other sought-after raw materials. This allows investors to benefit from niches they would otherwise be unlikely to invest in. The most recent example is fluorite.

Globex recently announced that it has secured a 100% interest in a contiguous claim block in the US state of Nevada. Located 140 km northeast of Las Vegas, the property covers an area of 117 square kilometers. Fluorite was discovered and mined on the property as early as 1957. Globex has been exploring the rock since 2024 and has encountered continuations of the historic vein. Numerous samples returned high fluorite grades ranging from 22.81% to 88.15% CaF2. Anomalous gold was also found.

Fluorite, also known as fluorspar, is mainly processed into hydrofluoric acid. This is found in everyday items such as toothpaste, computers, mobile phones, clothing, Teflon coatings, and refrigerants. Fluorite is also needed in the production of steel and light metals such as aluminum. As is often the case, China is the world's largest producer. Globex's new fluorite project in the US is therefore particularly exciting.

Globex will be presenting at the virtual 15th International Investor Forum - IIF - on May 21, 2025: Click here for free registration.

Deutz: Strong order intake and Buy recommendation

Since the customs chaos in early April, Deutz shares have gained more than 20%. As a result, the share is now targeting its 52-week high of EUR 7.94. According to Hauck Aufhäuser, there is significantly more upside potential. The analysts consider the engine manufacturer an "alpha idea." They see the fair value of the share at EUR 10.30 and accordingly recommend it as a "Buy". From the analysts' perspective, the development in the first quarter of 2025 was in line with expectations. Overall, they see Deutz on a sustainable growth path.

This is also necessary to justify the market capitalization of EUR 971 million. The highlight for Deutz in the first quarter of 2025 was undoubtedly the 30.3% increase in order intake to EUR 546.1 million. This gave Deutz an order backlog of EUR 616.2 million at the end of March and a solid basis for the coming months. Revenue rose by 7.5% to EUR 489.0 million.

Adjusted EBIT amounted to EUR 21.0 million (margin: 4.3%). A negative one-time effect from the "Future Fit" transformation program had a negative impact of EUR 25 million on the consolidated result. Nevertheless, operating cash flow increased significantly to EUR 50.9 million.

Strategically, Deutz continues to focus on alternative drive systems and a growing service business. Despite the current macroeconomic and geopolitical uncertainties, the Company is sticking to its full-year forecast and expects revenue of between EUR 2.1 billion and EUR 2.3 billion.

Hensoldt: Caution regarding order intake! Losing momentum?

Jefferies' opinion is likely to have dampened the mood among Hensoldt shareholders. The US firm's analysts recommend selling the defense electronics specialist shares. Although the experts expect Hensoldt to accelerate its growth, they believe the start to 2025 has been relatively subdued. They have therefore set a target price of EUR 60. Hensoldt shares are currently trading at EUR 73.

Similar to Deutz, Hensoldt also has a full order book. At the end of March, the technology company, known for its radars for the Eurofighter, had orders worth EUR 6.9 billion. However, order intake was subdued compared to the previous year, rising by 5.4% to EUR 701 million, weaker than revenue. In the first three months of the year, Hensoldt generated revenue of EUR 395 million, around 20% more than in the same period last year. Adjusted EBITDA was EUR 30 million, down from EUR 33 million in the previous year. This was due, among other things, to startup costs for a new logistics center.

Hensoldt confirmed its forecast for the full year 2025 and expects revenue of between EUR 2.5 billion and EUR 2.6 billion and an adjusted EBITDA margin of around 18%. With its record order backlog, the Company believes it is well-positioned to benefit from ongoing investment in defense and security in Europe.

Globex's new fluoride project demonstrates the diversity of its portfolio. Investors currently have an interesting opportunity to get in on the action. Deutz needs to shift up a gear or two in terms of sales to justify its valuation. The same probably applies to Hensoldt. Investors should keep an eye on the technology company's order intake in the coming quarters. It should not fall below revenue growth.