January 10th, 2022 | 10:22 CET
Tembo Gold, BioNTech, Valneva, MorphoSys - Turnaround or crash?
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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.
Tembo Gold - A lot of fantasy in Tanzania
Might 2022 be the year for precious metals? Tembo Gold has emerged as one of the ambitious newcomers among gold prospectors in East Africa in 2021. The stock was relatively quiet until the end of August, swinging listlessly back and forth between CAD 0.10 and 0.16 with little turnover. But then rumors arose, which were ultimately confirmed. The mining giant Barrick Gold has deeper interests in Tembo and is buying in significantly. For 6 sub-areas, Barrick put USD 6 million on the table. The whole thing can swing up to USD 45 million depending on drilling success.
The target focus of Tembo is the discovery and development of several gold projects in East Africa. Its immediate neighbor is Barrick's Bulyanhulu mine with 14 million gold ounces of proven reserves, and another well-known player is AngloGold Ashanti. Tembo will complete its current 7,000-meter drill program in 2022. Barrick announced by agreement to invest an additional USD 9 million in Tembo's properties over the next 4 years. As an initial investment, 5.5 million shares at CAD 0.27 were also acquired in the last placement. For Tembo, this is a well-filled cash box as a starting position for the upcoming exploration projects.
Tanzania has experienced a change of power in 2021, and the new government is being described as "mining friendly". With approximately 95 million shares issued, the market capitalization is currently CAD 25 million. Similar projects have already paid many times this amount in the case of a takeover. All in all, the coming year 2022 could be a Tembo year.
BioNTech - More of a hot potato
At the moment, every US stock market start resembles a sell-off in the BioNTech share. Since reaching the EUR 330 mark at the end of November, it has been going down almost daily. In the first week of January, prices below EUR 200 were reached. From a chart perspective, the share is still under intense pressure. A bottom is currently being sought.
Apart from any forecasts on the pandemic development, analysts' opinions on the BioNTech share are very good across the board. In a sector study, the analysts at Berenberg rate the shares of BioNTech as quite promising. They remain optimistic for the new year and the expected further vaccine developments. The price target of USD 400 is confirmed in the current study with a remaining buy recommendation. The experts also have high expectations from BioNTech's mRNA oncology pipeline.
If one believes the consensus estimates, BioNTech will achieve earnings per share of about EUR 36.5 in 2021, which should be just under 12% lower in 2022. With a share price of EUR 187, the calculated P/E ratio in 2022 is around 5.8. With the lush profits from 2021, a dividend could even be on the cards. Keep your eye on the ball.
Valneva - Approval not coming so quickly after all?
What happened here? At Christmas, French-Austrian Valneva was still above EUR 27, and now it is missing a whole EUR 10. The contagious coronavirus variant Omicron is visibly losing its scare. Some experts assume that the variant will lead to a timely end to the pandemic.
On the downside for Valneva, initial trial data on a Chinese inactivated vaccine failed to demonstrate efficacy against the variant. Valneva plans to launch such an inactivated vaccine in a few weeks. The rapid spread of the Omicron variant could therefore become a problem for manufacturers of dead vaccines. The extent to which Valneva is affected by this is currently difficult to assess and is a matter of speculation. It is possible that Valneva itself will make completely different statements about the vaccine's efficacy.
At present, of course, the battered chart is a burden. The recently formed upward trend was broken with the double-digit price slide at the beginning of the week. Unfortunately, the psychologically important EUR 20 mark also fell victim to this sell-off. Operationally, the market is currently only looking at Valneva's Corona research. It overlooks that the Company also has an interesting pipeline beyond the virus. The share is therefore interesting but remains highly speculative.
MorphoSys - Completely out of step****
What is going on with MorphoSys? The chart of the biotech-pharmaceutical Company shows a long-lasting suffering since the hoped-for growth driver Constellation Pharmaceuticals was taken over for a total of USD 1.7 billion. At that time, the market capitalization of MorphoSys shares was still around EUR 2.58 billion. Today, the merged group is valued at only EUR 1.14 billion on the stock market.
With an interim recovery to just under EUR 35, the share recently fell back like a stone to below EUR 30. JPMorgan analysts spoke up in the new year and lowered the price target from EUR 54 to EUR 40. The rating remains "Neutral". The reason given was that the price rally in the European pharmaceutical sector is not yet over, and the fundamental data continues to be positive, wrote analyst Richard Vosser in a sector study available since the beginning of the year. MorphoSys remains attractively valued in this regard, he said, but market estimates for the cancer drug Monjuvi are simply too high for the current year.
Be sure to pay attention to daily turnover when positioning in MorphoSys. A turn in the stock should be identified with high turnover. Currently, sellers and short-sellers still predominate. The investment house BlackRock reported a reduction in the investment ratio shortly before Christmas. Continue to observe only!
The year 2022 offers opportunities as well as naturally many risks. The bio and pharmaceutical sectors were among the top sectors in 2021. The current year 2022 could well bring a surprise in the precious metals sector because of inflationary pressure. Canadian Tembo Gold is in a great position and has a strong partner in Barrick Gold.
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