25. November 2020 | 11:44 CET
Sartorius, Drägerwerk, Desert Gold: Vaccines for the portfolio
The crisis is on the home stretch. Several vaccines have been found and are about to be approved. But it will still take a while before the pandemic is defeated: millions of people need to be vaccinated. Usually, two doses of vaccine are required for this purpose, which must be administered at specific intervals. This Herculean logistical task must succeed in many countries if normality is to be restored. This much seems inevitable: 2021 will still be under the influence of the virus. Corona also leaves its mark on the capital market, whether directly or indirectly.
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ISIN: CA25039N4084 , DE0007165631 , DE0005550602
More than ventilators: Drägerwerk
When the pandemic first struck in March 2020, Drägerwerk shares were quickly considered winners of the crisis. Drägerwerk produces protective masks and also respiratory equipment. At the beginning of the crisis, the latter, in particular, was considered a panacea - if you are ventilated, you can cure the virus and will be healthy afterwards. However, consequential damage caused by ventilation and the high mortality rate in older ventilation patients soon ensured that the focus is placed on preventing infections. At Drägerwerk, order intake nevertheless climbed by around 75% in the first half of 2020. Some orders, such as the agreement to supply FFP3 masks to the UK, even extend into 2021.
On the stock market, not much has remained of the profits from the first weeks of the pandemic. On a one-year horizon, the Drägerwerk share is still up 18 percent. But that is better than nothing. The long-term performance of the share price shows that the share was not doing so well even before the pandemic - on a three-year horizon, the value is negative - despite the pandemic profits. In view of the impending mass vaccinations, which may have to be repeated for years, the Drägerwerk share remains a solid choice. However, investors should no longer expect significant jumps.
Sartorius as best pandemic standard
Things look a little different at Sartorius. The Göttingen-based Company specializes in disposables for laboratories. Whenever drugs or vaccines are manufactured, products from Sartorius can be used. Since vaccines will be produced in the coming months without spilling, the prospects for Sartorius are incredibly positive. For 2020, the Company expects an increase in sales revenue of up to 26%. Best of all, this trend is likely to continue in 2021. Only then will the production of vaccines be ramped up further. At the same time, the motto "test, test, test" applies - here, too, Sartorius will benefit.
The share is already highly valued at present. In one year, the value has risen by more than one hundred percent. When a share price increases like clockwork, investors can sit back and relax, and, should stick with it. Sartorius is one of the best shares in the standard corona range. The good news is that the Company is well-positioned, even independent of the pandemic, and is anything but crisis-prone.
Desert Gold offers substance and a lever on the gold price
While states are pumping more and more money into the fight against the pandemic and its consequences, debt ratios, are climbing worldwide. Central banks are already standing by to support the starving economy - many industries are facing the end of the crisis. In the years 2008 to 2011, billions also flowed into rescue packages and emergency loans. At that time, the banking and euro crisis ensured that the price of gold rose rapidly and reached a new all-time high. This summer, the gold price reached this all-time high. Before that, a lot of speculative capital flowed into the gold market. The trend was recently reversed in the wake of better news on the economy and research laboratories.
Here could be an opportunity for investors who are not only thinking of healthcare stocks. Just as the pandemic will keep us busy for many months to come, the economy will continue to be on the drip from governments and central banks, and this should be a driver for the gold price. Companies such as the small Canadian Company Desert Gold could benefit.
Desert Gold operates in Mali, the fourth-largest gold producer in Africa. Although more than 26 million ounces of gold have already been proven as reserves in the country, the exploration potential is considered to be large. Although exploration is the field of activity of smaller companies, such as Desert Gold, large companies such as Barrick Gold, B2Gold, or Endeavour have already positioned themselves in Mali. Most recently, Kinross Gold also announced that it intends to sell projects in America in order to position itself in West Africa and Russia. Desert Gold has a property in the middle of a historic mining region and has already reported promising drill results. These include approximately 6.3 g/t over a distance of 13 metres.
The highest returns are seen off the beaten track
During the summer, the share was considered the insider tip and tripled in value within a few months. In the meantime, the value of the share has fallen significantly again. The reason is probably sales by speculative investors. If gold should end its consolidation and the market's focus should become more on economic uncertainty or rising inflation again, Desert Gold should quickly get back on track - after all, work is continuing, and the project is considered promising. Whether laboratory equipment, protective masks or the world's oldest independent currency - investors should position themselves where there is demand. The highest returns are sometimes achieved by investors who are looking for opportunities off the beaten track.