November 18th, 2021 | 13:40 CET
Siemens Healthineers, Troilus Gold, TeamViewer - All is set
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Despite the excellent underlying conditions with permanently high inflation, historically low-interest rates and staggering government debt, the gold price continues to fall short of expectations. While copper and other metals climbed to new all-time highs on the back of rising inflation, gold has struggled with the USD 1,850 mark for months. The fear that the rate of price increases will remain at a high level not only temporarily but permanently has led the precious yellow metal further north. What would now be necessary is a sustained breakout above the USD 1,891 mark to head for the USD 2,000 mark once again.
Troilus Gold is well prepared for a long-term rising gold price. Despite the excellent progress and positive drill results in recent months, the exploration company, which aims to become a gold producer by the end of 2022 at the latest, corrected by around 50% to currently EUR 0.63. That corresponds to a stock market value of just EUR 122.69 million. If one contrasts the assets, a clear undervaluation can be seen.
Significant resource expansion
Before the acquisition in 2017, more than 2 million ounces of gold and 70,000 pounds of copper had already been mined at the historic Troilus mine. It is located on a footprint of 1,420 sq km in the Canadian province of Quebec. Continuously executed drill programs totaling 80,000m produced a value study in 2020 confirming an 8.1 million ounce gold equivalent deposit at Troilus, approximately 85% gold and 15% copper, with a total valuation of about EUR 1.33 billion at a gold price of USD 1,750.
On its way to becoming a gold producer, Troilus Gold, led by its CEO, Justin Reid, plans to release another resource update and a pre-feasibility stage. In addition to the mine, the infrastructure acquired in 2017 is valued at approximately EUR 246 million, which includes double the market capitalization alone. In addition, Troilus Gold is expanding drilling by an additional 12,000m per month.
Analysts agree with the latest published results. Laurentian Bank Securities assigned a "buy" rating with a price target of CAD 3.30, and the analysts at Stifel also see a buy candidate with a target of CAD 4.00. Since May, Troilus has been on the list as a top pick at Cormark Securities with a price target of CAD 4.50.
On and on, the Siemens Healthineers stock goes, and the breakout to an all-time high of EUR 63.34 has fundamental reasons. Growth is to be accelerated in the coming years, the Siemens subsidiary announced Wednesday ahead of its Capital Markets Day. For fiscal years 2023 to 2025, the Munich-based Company is setting a sales growth target of 6% to 8%. Adjusted earnings per share are expected to increase by 12 to 15% annually. Previously, the Company had assumed sales growth of just 5% per year and adjusted earnings growth of 10%.
This plan is to be achieved through the development of new markets and innovations. Healthineers intends to focus on combating serious diseases such as cancer, cardiovascular and neurovascular diseases. Cancer therapy is also expected to be an important growth driver, especially the newly acquired US Company Variant. The radiation specialist was acquired in Q2 of this year for approximately USD 16 million. It is expected to grow sales between 9% to 12% annually with a margin of over 20%.
Due to the higher announced targets, the investment bank Jefferies has left the price target of EUR 53 and the rating at "hold".
Bought at the bottom?
At the moment, analyst houses are divided on how to deal with the fallen former stock market darling TeamViewer. The experts at Deutsche Bank, for example, see a hold on the Goeppingen-based Company with a price target of EUR 15, while Warburg Research gives the stock an outright "buy" and a target of EUR 26.
Buyers and sellers are also joining hands among the shareholders. The US investment company, The Capital Group Companies, has reduced its stake in TeamViewer AG from 4.8% to 2.83%. On the other hand, Supervisory Board member Dr. Abraham Palad sees a favorable entry opportunity at the current level and has purchased shares with an equivalent value of approximately EUR 550,000.
The markets are heading towards the end of the year and, minor corrections included, are likely to continue to eye new highs. Gold is currently struggling to break above the critical USD 1,891 mark. Troilus Gold is attractive at the current level, and Siemens Healthineers can also convince with a forecast increase.
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