June 14th, 2022 | 11:06 CEST
These are the stocks where the action is: TUI, Globex Mining, Varta
Table of contents:
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
TUI: Travel wave or summer wave?
Travel is booming again. Tour operator TUI has created capacity early on so that business can really boom in 2022. The Easter and Whitsun business could prove TUI's strategists right. People have not rushed outside and on vacation so naturally and unrestrainedly for a long time. But the BA.5 variant of Omicron has now also been confirmed in Germany. The variant quickly became dominant in South Africa and Portugal and caused rising incidences.
Some experts expect it to rise in Germany and even see a "summer wave". In view of the mild course of Omicron and the now widespread immunity in the population, intensive care units should not be overloaded even in summer. The danger, however, comes from elsewhere: just recently, the Puls Open Air Festival had to be canceled. The reason: On the second day of the event, to which thousands of people had traveled, not enough security personnel showed up. A huge event fell through. The damage is likely to be great.
In recent weeks, flights have also been canceled spontaneously. Frequent flyers report cancellations just a short time before their boarding. The summer travel wave could fall victim to the summer Corona wave. That is if the number of infected people rises and the wave hits employees working in tourism and flight operations. TUI's share price has also been falling for a long time. The share could stage a comeback if all goes well and the summer wave fails to materialize or is postponed until the fall. However, the signs are currently rather ominous.
Globex Mining: Many commodities, one share, low valuation
Far removed from current events, shareholders of Globex Mining are investing - at least at first glance. The Company from Canada collects raw material projects and earns with their sale or profit-sharing. Globex has more than 200 projects from different sectors in its portfolio. The raw materials involved are copper, nickel, lead, gold, silver, platinum, palladium, manganese, titanium, iron, molybdenum, lithium, cobalt and rare earths.
What unites all the projects is their location in North America. In addition to early-stage projects, Globex also has projects that offer a resource estimate (Rocmec 1 Gold) or even a resource estimate, including a feasibility study (Authier Lithium Royalty). Since Globex Mining is only valued at around EUR 50 million, the potential could quickly emerge if the market prices one of the many projects realistically as a potential production decision, or at least the path to it, draws closer. Globex Mining offers an interesting business model in a period of general scarcity and inflation. On a three-year view, the stock shows a volatile upward trend.
Varta: From beacon of hope to bedside rug
Varta's stock has also gained a whopping 84% over the past three years. However, even with the best will in the world, investors cannot recognize an upward trend. The reason: Since the high, the share has halved again, and the volatility of the past years might have left scorched earth for many private investors. Yet Varta is a promising company. Its accumulators and batteries enjoy an excellent reputation. However, the planned entry into the business with rechargeable batteries for e-cars has done the share more harm than good. The praise of the past years has so far been followed by little in the way of concrete results. The air is, therefore, out of the hopeful company. Even the comeback of other e-car stocks, such as BYD, has not yet rubbed off on Varta. That is not a good sign.
If you are looking for shares where the music will continue to play in the future, you have to take a middle course. Stocks that have already risen sharply are considered risky. Stocks that have hardly moved at all may not be in demand. A look at valuations and possible hidden reserves can also tip the scales. Such attributes provide investors with a risk buffer in case things do not go so well after all. Globex Mining appears to be well-positioned with around 200 commodity projects and a valuation of only around EUR 50 million. Add to that rising commodity prices and inflation, which should make tangible assets in the ground attractive.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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