June 9th, 2022 | 10:03 CEST
Rheinmetall and BYD with new partners and Triumph Gold facing long-term buy signal
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"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Triumph Gold - Further anticyclical buying opportunity
Opinions are divided on gold. Fundamentally, according to the tenor of most market participants, the precious yellow metal should already be far above the highs at around USD 2,070 per ounce. High inflation, coupled with historically low interest rates, should help gold, in particular, to reach new highs sooner or later. In addition, the historically high levels of national debt make it almost impossible to raise interest rates too much. On the other hand, there is the opinion from the ranks of the Elliott wave chartists that a completed downward wave, which should find its end between USD 1,600 and USD 1,680 per ounce, is still needed before the major shot to significantly new highs should take place.
However, the fact is that gold has always served as a hedge against inflation, and this time, too, a ratio of around 10% should be targeted by the portfolio to guard against inflation. In addition to physical gold, it is time to invest anticyclically in attractive gold mine producers or explorers such as Triumph Gold. The focus of the Canadians is on the Freegold Mountain project in the mining-friendly Yukon. The Freegold Mountain project is 100% owned by Triumph Gold. It hosts three National Instrument 43-101 compliant mineral deposits, Nucleus, Revenue and Tinta Hill, and the Big Creek and Tad/Toro properties, which in addition to gold, also contain copper, an essential metal for the energy transition.
Looking at the recently announced results from last year's 6,615m diamond drill program, one can see the property's enormous potential. Anomalous gold, silver and copper values were intersected in each reported drill hole. The results also indicate a broad mineralized system with zones hosting large ore tonnages and containing oxide, transition and sulphide ores alike. In the process, Triumph Gold discovered gold mineralization in the Big Creek South Fault zone during drilling 300m away from the Nucleus deposit in the Yukon. With a market capitalization of EUR 8.25 million, Triumph Gold should benefit disproportionately from a sustained increase in the gold price.
BYD - New friendships are formed
It would be a kind of elephant wedding in the electric mobility industry. BYD and Tesla united. At least as far as the battery business with the self-developed blade technology at the Chinese automaker is concerned, the US top dog could soon become the first major customer. "We are now good friends with Elon Musk because we are preparing to supply Tesla with batteries very soon," Lian Yubo, BYD's executive vice president, told CNBC in an interview with Chinese state media.
The "Build Your Dream" company announced another bang for the buck on the occasion of its latest sales figures for May. With 114,943 vehicles delivered, the already excellent April figures of 106,042 were topped once again. Compared to the previous year, the volume of electrically powered vehicles more than tripled, increasing by over 250%. Since January 2022, BYD increased NEV sales by 348.1% to 507,314 vehicles. Extrapolated to the full year, this would bring the Company's electric car sales to around 1.2 million.
The latest successes are reflected in the extremely pleasing technical chart picture. At EUR 36.08, the BYD share price on Tradegate is close to reaching a new high of EUR 36.70. If this level is reached, the stock will likely see another strong volume. In the long term, BYD seems the most promising bet on electromobility.
Rheinmetall - Sensible joint venture
New orders for the Rheinmetall defense group are reported almost daily. Without a doubt, the critical situation in Ukraine and the rearmament in the Western world are benefiting the company. The full order books have already been rewarded with share price increases of over 100% to levels of just under EUR 225. Currently, the share price is picking up again after a correction to EUR 180. From a chart perspective, it could once again knock on the highs. It is doubtful whether there will be enough strength for another big move after that. In addition to the ambitious valuation, several indicators are in the overbought zone, so a cooling of the share price cannot be ruled out.
Fundamentally, Rheinmetall could announce a joint venture with Krauss-Maffei Wegmann (KMW) in Lithuania. The joint venture will provide logistical support for the combat vehicles of the Lithuanian and other NATO forces stationed in the Baltic region. The two joint venture partners each hold a 50% stake in the Company called "Lithuania Defense Services". According to a company statement, the main task will be to support the Lithuanian version of the "Vilkas" Boxer armoured personnel carrier. In addition, other combat vehicles of the Baltic states and those used by NATO forces stationed in the Baltics during Enhanced Forward Presence rotations will be repaired. These include the joint Boxer and Puma infantry fighting vehicle systems, the 3 Buffalo armoured recovery vehicle in various variants, the Leopard 2 main battle tank and the self-propelled howitzer 2000.
Despite some signs of strength, the stock market is not yet showing a clear trend that the correction is over. BYD and Rheinmetall are performing unaffected by this. Triumph Gold should be bought anticyclically in the long term.
Conflict of interest
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