Renk, Hensoldt, Newmont, Benton Resources: New RECORDS for gold and defense stocks

Benton Resources instead of Barrick and Newmont?

Last week, gold broke through the USD 2,800 per ounce mark. Although it was only just, it still matters. The first experts also expect the USD 3,000 mark to be reached this year. Numerous central banks – above all, China – would continue to buy gold to reduce their dependence on the US dollar. Furthermore, gold will become more attractive again with the expected further interest rate cuts in the current year.

So far, the major producers such as Barrick and Newmont have not been able to benefit from the record in gold. They have clean balance sheets, buy shares, and distribute dividends. But this does not seem to convince gold investors. They would rather see acquisitions and growth – preferably in legally secure regions.

One such candidate is Benton Resources. This Canadian explorer, still largely unknown in Germany, is focused on gold and copper – similar to Barrick. The management and the board have more than 150 years of exploration experience. The Company is currently valued at only EUR 12 million. However, the Company has cash and shareholdings of CAD 4.5 million due to a capital increase. The funds for further drilling and the associated positive news flow are therefore available.

The core project of Benton Resources is the "Great Burnt" project in Newfoundland, Canada. It already has an estimated mineral resource of 667,000 tons at 3.21% Cu (indicated) and 482,000 tons at 2.35% Cu (inferred). The zones can still be significantly expanded. In addition to copper and gold, other base metals such as zinc and nickel have been identified. A drilling program is ongoing and should provide exciting news flow in the coming weeks.

Another share price driver is the former subsidiary Vinland Lithium. The lithium explorer was spun off in January and is to be listed on the stock exchange by March. As part of the spinout, Piedmont Lithium has taken a CAD 2 million stake in Vinland. Piedmont – backed by mining legend Eric Sprott – is listed on the Nasdaq and valued at USD 180 million. In the future, Benton and Piedmont will each hold 2 million shares in Vinland.

As a result, the Benton Resources share – which is also traded on German stock exchanges – is on the verge of an exciting news flow and appears to be anything but expensive at a price of CAD 0.09.

Renk: Another 40% price increase?

Renk's shares rose a solid 30% in the first month of the year. This means the share has outperformed the German industry leader Rheinmetall by a solid 5 percentage points. This seems to have shaken off the difficult share price performance in 2024 for the Company, which is known for its transmissions for the Leopard 2 tank.

In any case, the preliminary figures for 2024 were convincing. According to these, Renk increased revenue by 23% to EUR 1.1 billion. Adjusted EBIT was EUR 189 million. This means that the forecasts were met. The fourth quarter was particularly strong and suggests that the positive trend will continue in 2025. Outgoing CEO Susanne Wiegand comments: "I am delighted that we are able to present such good results in our first year as a listed company. We have successfully achieved our revenue target for fiscal year 24, and our adjusted EBIT is at the upper end of our forecast. It is particularly pleasing to see the Company in such a strong position as I step down as CEO and hand over to my successor, Dr. Alexander Sagel. RENK is well positioned to take advantage of growth opportunities as they arise, and I look forward to following the Company's development closely in the future."

Following the figures, Hauck Aufhäuser, among others, confirmed its "Buy" recommendation. The analysts see Renk fairly valued at a price of EUR 35. The share is currently trading at just under EUR 25 and thus still offers considerable upside potential.

Hensoldt: Profiting from the struggling automotive suppliers

Hauck Aufhäuser is also optimistic about Hensoldt. The stock is recommended as a "Buy" with a price target of EUR 52. The electronics group should benefit from the need to improve air defense. In the still young year, however, Hensoldt's stock is still lagging behind the peer group with a gain of around 15%.

New personnel may boost growth. Hensoldt could benefit from the difficulties in the automotive industry. Continental, for example, plans to lay off several thousand employees. The Wetzlar site, with around 360 jobs, is even to be closed down completely. Hensoldt sees this as an opportunity to attract skilled workers. Representatives of the defense company are said to have already been on site in Wetzlar to advertise themselves and accept applications. As early as December 2024, Hensoldt CEO Oliver Dörre had told the news service Bloomberg that he was looking to hire employees from two automotive suppliers. Software developers are likely to be in particular demand.

As part of the medium-term forecast increase in December 2024, Dörre had also stated: "We will continue to benefit from significant and sustained market growth driven by high demand for defense solutions in Germany, Europe, and worldwide. As a technology and innovation leader in the field of defense electronics, we are strongly positioned in the market and, with the German government as our anchor shareholder, we can count on strong political support. With our new "North Star" strategy, we have a clear plan for transforming our company and making it fit for the future. Our goal is to generate around EUR 5 billion in revenue by 2030 – primarily through organic growth." Hensoldt could certainly make good use of new specialists for this organic growth.

Explorers like Benton Resources have the opportunity to benefit disproportionately from the raw materials boom. Investors can look forward to a lively news flow from the Canadians in the coming weeks. In the case of Hensoldt, the planned medium-term growth of 10% per year seems somewhat disappointing given the framework conditions. After all, Hensoldt is valued more as a technology company. Its growth should be higher. By contrast, Renk's shares seem to have turned the corner. In any case, the year has started promisingly.