February 16th, 2022 | 11:14 CET
The technical breakout: Barrick Gold, Tembo Gold, Delivery Hero - Huge gold rally ahead!
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
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.
Gold and silver - Technically, this looks quite good
Just as Russia has taken its threatening gestures towards Ukraine to a new level with troop movements, gold and silver saw strategic positioning by major market participants. This can be seen in the increased turnover in gold and silver stocks as well as in the significant increase in derivatives trading volume on the CBOT. Technically, at around USD 1,860, gold is only just short of the last upward resistance line at around USD 1,877. In the case of its smaller brother, silver, an important zone lies between USD 24.40 and USD 24.80. That is where the markets are still a few feet away. Watch out for the turnover and for striking intraday reversal movements!
Barrick Gold - The figures for the year 2021 are in
The world's second-largest gold producer Barrick Gold has had a solid 2021, even if the share price has only delivered a zero performance all year. The mining giant was able to deleverage to the point where the balance sheet now shows net cash, and the dividend was raised a full 3 times.
Barrick Gold has now released preliminary production results for the full year 2021. They show that the Company was able to meet its annual targets for the third year in a row, despite ongoing challenges from the COVID-19 pandemic. Preliminary full-year gold production of 4.44 million ounces was within the guidance range of 4.4 to 4.7 million ounces, with both Africa and the Middle East and Latin America and Asia Pacific regions ending the year at the high end of their regional gold guidance. Preliminary copper production of 415 million pounds was also within the forecast range of 410 to 460 million pounds.
In the fourth quarter, the average market price for gold was USD 1,795 per ounce; correspondingly, copper averaged USD 4.40 per pound. Currently, the price nibbles at the EUR 18.0 mark; if it goes through here, EUR 20 is quickly back in the room. Today at 5 pm CET, Barrick will present its operating figures for 2021. Listen to the words of CEO Mark Bristow. He should be able to convince investors. Therefore, stock up the standard value quietly again - the gold bet will work out in 2022!
Tembo Gold - The closing of ranks in Tanzania
It was quiet around the Tanzanian gold explorer Tembo Gold for a whole 7 years. But then there was activity again! The price jumped from CAD 0.13 to 0.34 at the peak in 2021 without any warning. The eternal rumor that a major had put out feelers came true in the form of talks with African neighbor Barrick Gold. The inactive observers were overtaken on the left with large turnovers, and now the price is 70% higher.
Tembo's properties are located in Tanzania near Lake Victoria, a zone with historically eye-catching gold reserves. Its immediate neighbor is Barrick's Bulyanhulu mine with 14 million gold ounces of proven reserves; another resident player is also AngloGold Ashanti with its Geita gold mine. At the end of 2021 there was a promising deal with Barrick for previously unused licenses. They will be handed over to Tembo as part of a double-digit investment by Barrick, with lavish exploration financing on top. The deal is expected to go through in the first quarter of 2022 and will take Tembo into a new dimension.
With the signing of the recent license and share purchase agreements with Barrick Gold's subsidiary Bulyanhulu Mine and the associated financing, the protagonists are now just waiting for the necessary regulatory approvals and the fulfillment of all closing conditions. The government of Tanzania has signaled its approval of the planned activities. After that, drilling activities will start on the Tembo property and some neighboring properties, and the value enhancement of the assets can begin. Tembo Gold's share price is currently consolidating between CAD 0.23 and 0.28. Those who want to be part of the action buy heartily in this range. The newsflow in 2022 should still hold surprises.
Delivery Hero - The fabulous 70% crash of a DAX stock
Who would have thought it? With the proclaimed transition of the pandemic to an endemic classified as controllable, the so-called "corona profiteers" are caught ice-cold. Investors are right to lament the lack of an ability to generate profits from a socially exceptional situation with a showcase business model. After all, Delivery Hero is the supplier for all the people who have not wanted to leave their homes in recent months.
Therefore, the Company's poor operating performance remains incomprehensible, as Delivery Hero falls far short of expectations on the road to profitability. In 2021, the profit margin in relation to the delivery platform's revenue was minus 2.2%, but plus 2% had been announced. The Company expects an operating loss of several million in 2022. The expected gross merchandise value of EUR 44 to 45 billion turns out to be too conservative, as this target figure puts the delivery service a full 6% below market expectations. This is causing disillusionment among investors.
The strategy is probably designed for the very long term. According to its CEO Niklas Oestberg, Delivery Hero has set itself the goal of becoming the market leader in all segments. No matter what the cost. Oestberg is taking his cue from Amazon: For years, the online retailer sacrificed short-term profits for long-term success. But Delivery Hero has yet to prove that its strategy works in the face of strong competition.
In recent days, the stock has continued its downward slide to below EUR 39 but has recovered a good 15% since this low point. There have already been numerous downgrades by analysts, but overall the experts still have to be given time to reconsider their votes. According to consensus estimates, the first net profit will likely not be achieved until 2026. Given the fluctuations, Delivery should nevertheless be very popular as a trading stock. Its stock market value, which has melted to just under EUR 10 billion, threatens its relegation to the MDAX.
Sell-off moods on the stock markets often provide attractive entry opportunities. Barrick Gold and Delivery Hero fluctuate a good 5% a day, which calls the traders to the scene. If you are more interested in the medium-term outlook, you can add all 3 of the stocks discussed to your portfolio.
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