November 24th, 2022 | 14:14 CET
Rheinmetall, Saturn Oil + Gas, Amazon - These shares are growing in the face of crises
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
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Rheinmetall - Ring swap tanks for Greece
There are several ways to deliver major weapons to war zones like Ukraine. A so-called ring swap comes into play: other countries can supply heavy Soviet-designed weapons to Ukraine and receive replacements from Germany in return. Rheinmetall supplies "Marder 1A3" infantry fighting vehicles to Greece. These first examples of the Marder infantry fighting vehicles were presented at the Greek Armed Forces' National Day parade in Thessaloniki on October 28.
The Greek Armed Forces will transfer Soviet-designed infantry fighting vehicles and other military equipment to Ukraine to support it. This is a swap: Ukraine will receive the tanks, and Greece will receive Marder 1A3 infantry fighting vehicles in exchange. In addition to the tanks, an ammunition package, an integrated service package including training services, and a spare parts package will also be provided by the Bundeswehr and Rheinmetall. Delivery is scheduled to be completed by the end of 2023.
Shortly after the Russian attack on Ukraine, Rheinmetall had already submitted a list of military products that were available relatively quickly, including tanks, trucks and ammunition. Prior to the war of aggression by the Russians in Ukraine, Rheinmetall shares were bobbing along at around EUR 90. As of February 24, the share price has risen rapidly and currently stands at EUR 192.80. Over the year, this represents a price gain of 127.14%. Analysts give a buy recommendation. JPMorgan Chase & Co. raised the price target for Rheinmetall shares from EUR 240.00 (USD 244.90) to EUR 265.00 (USD 270.41).
Saturn Oil & Gas - Well equipped for the energy turnaround
Oil prices fell by more than USD 1 per barrel on Wednesday as G7 nations considered a price cap on Russian oil above current price levels. The leaders are seeking a price cap for Russian oil in the range of USD 65 to USD 70 per barrel.
The OECD economic forecast also added pressure. "On the positive side, the OECD does not expect a global recession, which may have helped oil prices and stocks to rise further," said Tamas Varga, an analyst at PVM Oil Associates.
One of the top ten players in the Canadian oil industry is Saturn Oil & Gas. Saturn Oil & Gas Inc, a Canadian energy company, focuses on the responsible development of high-quality light oil projects. This can generate lucrative returns for shareholders. For those who would like to ask CEO John Jeffrey a question directly, there will be an opportunity on December 7 at the 5th IIF - International Investment Forum. Free registration for the virtual event is here (link ii-forum.com/speaker/john-jeffrey-ceo-saturn-oil-gas-inc).
Saturn's long-term growth potential can be seen in part through its acquisition strategy, which targets value-added, complementary assets. Saturn has built an attractive portfolio of ongoing free cash flow, low decline projects in Canada's Southeast Saskatchewan and West Central Saskatchewan regions that offer long-term economic drilling opportunities in multiple zones. Upon completion of the 12 wells at Viking in 2022, Saturn will continue to accumulate 30 days of production at average initial rates of 43% above Saturn's expected type curves used for guidance.
Per location, capital costs are expected to increase by approximately 28% over the plan. To date, Saturn has had 18 wells drilled in the Oxbow region targeting the Frobisher and Tilston light oil formations with 30 days of production data, including wells drilled at the start of the drilling program at Oxbow in the fourth quarter of 2021. Production results and capital costs are each in line with expected assumptions.
Amazon - Alexa alone at home
The digital voice assistant with a charming female voice - Alexa - is not delivering on its development team's promise of entering millions of private homes. Once a favorite of Jeff Bezos, the Echo dot was expected to generate entirely new revenue streams. According to the marketing departments, users would use Alexa to buy food and other everyday items.
But consumers haven't outgrown "Hey Alexa, what's the weather like?" and "Alexa, play music to relax." The little tech blob also came into disrepute as it mutated into a big eavesdropper, not only listening in on private conversations but also recording them. All for the benefit of AI training, of course. The idea of shopping via voice command did not take off.
The Alexa division at Amazon caused a loss of USD 3 billion in the first quarter of 2022 alone - twice as much as any other division at Amazon. Alexa is organized into the "Worldwide Digital" division, which includes Prime Video. Still, the hardware division is said to account for the bulk of the losses. This is expected to cause a loss in the range of about USD 10 billion in the current year, according to Business Insider Business Insider, citing internal company documents.
Amazon is announcing its largest wave of layoffs to date, with more than 10,000 people said to be affected. The Alexa department seems to be the "main target" of the layoffs. In recent weeks, there have been mass layoffs at US tech giants. New Twitter chief Elon Musk laid off much of the workforce from the micro-messaging service. Additionally, he lifted the Company's policy of working from home. That resulted in nearly 1,200 employees quitting after Musk's "hardcore work time" ultimatum, forcing Twitter to close its offices through Monday. The dream of a digital assistant has yet to be shelved. With the purchase of iRobot iRobot, Amazon is now tinkering with the household robot and its unimagined commercial add-on possibilities.
For commodities investors, John Jeffrey will be available to answer questions from investors on December 7 at the 5th IIF - International Investment Forum. Not responding in the future will be Alexa, the digital voice assistant has yet to fulfill the business models envisioned for her. Consumers are not yet used to going on a shopping spree by voice. On the other hand, the Greek military is happy about fresh goods. Thanks to a ring swap, the German arms manufacturer Rheinmetall is delivering Marder tanks.
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