February 12th, 2021 | 14:11 CET
Steinhoff, Osino Resources, Sibanye Stillwater- Bargain hunters beware!
When is a stock cheap? The obvious criterion of a low stock price can sometimes be misleading. For value investors, a stock is cheap when the stock price and intrinsic value are too far apart. Still, other investors "buy" the trend and bet that the movement will continue when the price rises. All approaches have one thing in common: the profit lies in the purchase. We will make you winners!
time to read: 2 minutes | Author: Carsten Mainitz
ISIN: CA68828L1004 , NL0011375019 , ZAE000259701
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Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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STEINHOFF INTERNATIONAL HOLDINGS NV - next Monday will be exciting!
The price of the penny stock has doubled since the beginning of the year. The rise occurred, in particular in the wake of speculation that the protracted legal disputes resulting from the massive accounting scandal from 2017 could now be coming to an end.
However, investors will find out next Monday whether there may still be signs of a setback. A group of investors has asked the competent court in Amsterdam to appoint a new expert to clarify various issues, citing Dutch insolvency law. It is currently impossible to estimate what impact this latest round of legal penalties will have. The Group has at least strongly resisted this step.
Thus, a lot is going on at Steinhoff - also behind the scenes. Goldman Sachs has secured a 2.8% block of shares recently. There was also an update on the development of the listed South African subsidiary Pepkor, in which Steinhoff holds around 68%. As a result, Steinhoff's stake is currently worth around EUR 2.2 billion. At first glance, the parent company's market capitalization appears very moderate at around EUR 500 million. But the lawsuits of around USD 8 billion floating in the air put the whole thing into perspective. Steinhoff's settlement offer is around USD 1 billion. So it remains very exciting!
OSINO RESOURCES CORP - important milestones in the next months
The Canadian gold explorer released further encouraging drill results from the Twin Hills Central Project and the new Clouds Zone in late January. These results show continuing mineralization and near-surface mineralization at the Clouds zone. In addition, the Company announced that it plans to carry out an extensive drilling program of 75,000 meters in the current year. The Canadians plan to release a resource estimate before the end of the first quarter and a prospective economic assessment (PEA) no later than the end of June.
Osino Resources has focused on acquiring and developing gold projects in Namibia and holds 23 exclusive prospecting licenses covering an area of 6,577 sq km. Namibia is mining-friendly and is considered one of the most stable jurisdictions on the continent, both politically and socially.
The share has been trading in a corridor of around CAD 1.20 to CAD 1.45 over the last three months. At the latest with the hard facts the Company plans to publish at the end of Q1 and Q2, the share should break out on the upside. With a current market value of CAD 125 million, the Company is by no means overvalued given the project's quality and size.
SIBANYE STILLWATER LIMITED - 2020 Earnings Exceed Market Expectations
Sibanye-Stillwater is the largest gold producer in Africa and is among the TOP 3 platinum and palladium producers globally. Last week, the Group published its preliminary figures for the past fiscal year, exceeding market expectations.
Significantly higher precious metal prices and a weak rand made profits bubble up. According to preliminary calculations, the South African Company achieved a profit for the year of USD 1.75 billion to USD 1.82 billion, corresponding to earnings per share of between USD 0.64 and USD 0.67. Analysts, on average, had expected consolidated revenue of USD 1.7 billion. By comparison, business performance was still very problematic in 2019, resulting in a profit of only USD 4 million.
Experts expect profits to continue to rise significantly to around USD 3 billion in the current fiscal year. Based on these forecasts, the 2021 P/E ratio is about 4.7, a very moderate valuation level. The stock has more than quadrupled since its low last spring. Nevertheless, analysts see further upside potential of 14% on average in the short term.
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