October 18th, 2021 | 13:37 CEST
TeamViewer, Desert Gold, TUI - Full speed ahead to the turnaround?
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"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
TeamViewer - Disappointment across the board
It was a crystal-clear profit warning and a cloudy outlook for the near future. Following weak preliminary quarterly figures, TeamViewer conceded all short- and medium-term forecasts last week. Executive Board member Oliver Steil was forced to admit that the Company's so-called billings, sales, and operating margin will not reach the targeted projections for the current year.
The share price fell by half within a month, reaching a new all-time low of EUR 13.47 in October. Following the figures, several analysts significantly lowered their estimates and price targets. A significant technical countermovement has so far failed to materialize. Deutsche Bank reacted with a dramatic cut in its price target from EUR 40 to EUR 16.50. DB analyst Gianmarco Conti was surprised by the magnitude of the negative earnings outlook. DZ Bank followed with its assessment and lowered the price forecast from EUR 24.50 to EUR 16.20.
The new guideline reads: TeamViewer now forecasts an adjusted EBITDA margin of only between 44% and 46% for fiscal 2021, instead of 49% to 51% previously. Revenue is also expected to be around 7% lower at EUR 495 to 505 million than the EUR 525 to 540 million forecasts. It is not a great forecast, but it is not a disaster for the heavily discounted share price.
To reach the analysts' average target price of EUR 22.6 again, the Executive Board must regain investors' lost confidence as quickly as possible. The first opportunity will be at the Capital Markets Day in November. The TeamViewer share remains attractive for a speculative 50% recovery, but those looking further ahead will need a lot of staying power!
Desert Gold Ventures - A great project in Africa
The situation with Desert Gold Ventures is quite different. The Canadian Company is a gold explorer that focuses on deposits in the African state of Mali. Many major players are active there, some of them in the direct vicinity of Desert. The country ranks high in gold deposits, and its government is friendly to mining companies. No wonder, as gold miners are regularly willing to create new jobs in this politically difficult country.
Desert Gold currently owns a 410 square kilometer property called SMSZ. It is the largest contiguous non-producing land package in this region of the country. The Company's objective is to discover a Tier 1 gold deposit associated with the regional gold-bearing fault and shear zones that run through the SMSZ project. Exploration at the SMSZ project has identified more than 22 gold zones, with exploration data to date from 2021 strongly suggesting that a highly prospective zone is being explored.
Desert has now announced new gold exploration targets from 257 drill holes over 18,161 meters in early October. Based on the lab's schedule, the Company expects most results as early as mid-October. Drilling at Manakato returned anomalous to strong gold grades with intercepts of up to 1.65 g/t gold over 21 meters and five thick zones, from 10 to 45 meters, with gold-bearing alteration ranging from 0.1 to 0.5 g/t gold. Highlights in the Manakoto area include a historic drill intercept of 1.84 g/t gold over 30 meters and numerous anomalous gold trends defined with auger drilling. Good grades, but narrow gold zones, were also intersected at the north end and at depth near the southern extension of the Barani East zone.
Desert Gold's CEO, Jared Scharf, commented, "Initial exploration results from Manakato show several thick zones of gold enrichment that indicate the potential for a large gold deposit with the help of further work. Gold mineralization in the Barani East zone is traceable for more than 2.5 kilometers." Desert shares (DAU) have already responded, rising from CAD 0.11 to 0.14, and the stock could pull away quickly as gold prices rise.
TUI - With new capital into a sunny future
The TUI share has set sail following the successful capital increase. However, after a mixed summer business, the tour operator has to weather the traditionally difficult winter half-year. After all, prices for the winter program are significantly above the pre-Corona level of the 2018/2019 season. Thailand, a traditionally very important long-haul destination for the winter, opens its doors to Germans from November.
If you ask the travel industry, most major tourism companies expect next year to be about 80% of 2019 sales. Following the difficult years of 2021 and 2022, the pandemic is expected to lose impact on tourism by 2023 at the latest. A mini-survey by Peakwork also showed this. The winter half-year is traditionally loss-making for the Mediterranean specialist TUI, so the overriding focus is on the coming summer of 2022.
Looking at the Hanover-based Company's finances, it is starting to see the light at the end of the tunnel. At the beginning of October, the group said it had financial resources and unused credit lines of EUR 3.4 billion at its disposal. The current capital increase will raise potential liquidity to EUR 4.5 billion.
Technically, the situation for the TUI share is now exciting. From below, the 50-day line at EUR 2.89 shows support, but the 200-day line at EUR 3.30 is just as close. We expect that the share will instead sound out the upper range. However, a speculative buy should be equipped with a tight stop at EUR 2.85.
In bull markets, many investors look for stocks that have fallen behind. At TeamViewer, a profit warning is currently being processed in the share price, and Hanover-based TUI is struggling to make a comeback in sales as a beaten-up travel provider. Desert Gold is small but a possible surprise stock for the next gold bull market because of the excellent drilling successes.
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