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July 20th, 2023 | 07:30 CEST

Rheinmetall, Viva Gold, Palantir - Unstoppable

  • Mining
  • Gold
  • Software
  • armaments
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Remember the stock market adage, "Sell in May and go away"? Those who would have said goodbye to the stock market this year would have missed out on a lot. Driven by AI hype, the Nasdaq technology exchange alone rose by almost 25%, while the S&P 500 climbed by around 13%. The crypto and precious metals markets also ended their winter hibernation and are on the verge of striking buy signals.

time to read: 4 minutes | Author: Stefan Feulner

Table of contents:

    Rheinmetall AG - Another major order gives wings

    Piece by piece, the Rheinmetall share is working its way back to its downward trend formed since the beginning of April this year, which runs just above the current price level at EUR 259.10. On the downside, the share price should not break through the upward trend established in the short term at EUR 241.80.

    The positive underlying sentiment was fueled by a major order worth EUR 1.3 billion from the German Bundeswehr. The order includes large quantities of combat and training ammunition for the artillery forces. Initial orders have already been called upon immediately after the contract was signed. Delivery of these projectiles, worth EUR 127 million, is to take place in the short term in order to replenish the armed forces' ammunition stocks.

    Important for shareholders will be August 10. On this date, the integrated technology group will report on its business performance for the second quarter. The major Swiss bank UBS, with its analyst Guillermo Peigneux Lojo, expects a weaker performance. However, the growth targets from own resources for the full year should be confirmed, as the new orders implied therein would come in from the current quarter onwards. The verdict is "Hold" with a price target of EUR 233. In contrast, JP Morgan reiterated its price target of EUR 320 for the DAX company and, along with Babcock, sees Rheinmetall as a preferred stock from the defence sector.

    Viva Gold - In concert with the big players

    High inflation, further escalating trouble spots, and a possible turning point in monetary policy - The precious metal gold is coming back into fashion, as the base price is preparing to regain the psychologically important mark. The way to higher realms would, of course, be paved by a jump of the gold price above the previous all-time high at USD 2,081.82 per ounce. Although this level is only 5% off the current price, gold producers, as well as smaller exploration companies, have not been able to mirror the performance, but historically should make up for it if the trend continues for a longer period of time.

    Shares of mining company Viva Gold, with a market cap of CAD 16.55 million, lost about 75% of their value from their all-time high of CAD 0.68 and are currently trading at CAD 0.16. However, a jump above the year-to-date high at CAD 0.19 would open up considerable potential for the stock to reach the CAD 0.28 range.

    Viva Gold operates the 100% owned Tonopah Gold Project. The 4,250-hectare deposit is located in the Walker Lane Trend in Nevada, which is known for high mineralization. Just 30 km from Tonopah is Kinross' Round Mountain mine, which produced 258,000 ounces of gold in 2021. In addition, Coeur Mining, Augusta and Centerra are producing mines in the broader neighborhood.

    The project has an indicated gold mineral resource of 394,000 ounces grading 0.78 g/t gold and 206,000 ounces of inferred resources at 0.87 g/t, with Viva Gold achieving mineral resource increases every year since the 2017 acquisition.

    A preliminary economic analysis, PEA, of the project as an open pit heap leach development opportunity was completed and delivered compelling economic results in 2022, and an updated NI43-101 resource estimate and preliminary economic assessment for the project have already been commissioned. There were also positive values for the drilling program that has just commenced. Drill hole TG2302 averaged 1.4 g/t gold over 34 m and confirmed an extensive zone of high-grade mineralization in the area. The focus of the 2023 drill program is on upgrading zones of inferred mineralization to measured and indicated mineralization on closing large drill gaps within the resource pit area and determining the true orientation and extent of the near-surface, high-grade fault zones discovered last year.

    Palantir - Unstoppable

    Data analytics specialist Palantir has been among the high flyers in recent months, driven by artificial intelligence hype. Since the beginning of the year, the stock has gained more than 160% to USD 18.96 after lows of USD 7.28. The next resistance area is USD 19.45. Should this be broken, the way to the zone around USD 24 would be free. The achievement of the target in the first attempt is doubtful due to the current overbought condition. A healthier scenario would involve a pullback towards USD 14.83 before the Americans initiate the next upward wave.

    The latest cooperation was with SpecterOps to provide SpecterOps' BloodHound Enterprise solution to the government sector via Palantir's FedStart offering. Through this partnership, Palantir FedStart, a SaaS offering that accelerates federal time to market by enabling companies to run their products in Palantir's secure and accredited environment, will help SpecterOps deliver its enterprise-grade defence solution to government agencies. Leveraging Palantir's experience working with the government and expertise in managing secure cloud software, FedStart helps companies become FedRAMP and IL-5 compliant very quickly and can enable accreditation within weeks - at a fraction of the cost of traditional routes.

    The Denver, Colorado-based company will present its second-quarter figures on August 7.

    Rheinmetall bags another billion-dollar order from the German armed forces. Palantir continues to benefit from the AI hype. Viva Gold has enormous catch-up potential to the gold price and should outperform the base price if the positive news flow continues and the trend in the precious metals sector remains positive.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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