April 1st, 2022 | 13:00 CEST
TUI, Barsele Minerals, BYD: Some stock speculations can be expensive
Table of contents:
"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
TUI: How many vacations will fall through in 2022?
The steps taken to combat the pandemic are largely coming to an end these days. That could give a tailwind to beleaguered sectors such as the tourism industry. Millions of people long for sun, beach and sea - or mountains and lakes. Therefore, the new freedom is just the thing for people to go on vacation again. But there are still high incidences and a contagious virus variant. Although it primarily causes colds and coughs rather than pain or even more severe consequences, a particular residual risk remains for those at risk. The most harmless cold can turn into a mood killer if the second line appears on the rapid test. Travel plans are then quickly ruined. Although the tourism industry has long since taken out insurance against quarantine and illnesses before or during travel, a residual risk remains. If some trips fall through now at Easter, many people could postpone their bookings and prefer to travel spontaneously within Germany.
That could be a risk for TUI, which has already ramped up capacities for travel at an early stage. It does not currently look as if the travel season will be a washout, especially as the general inflation has led to the credo "it is better to have than to need". Nevertheless, investors should not be blindly infected by the general easing euphoria. In particular, companies that offer travel, plan events or otherwise make advance payments are still not out of the woods. Although lockdowns are no longer imminent, customers and employees in quarantine could thwart many plans. TUI's stock has gained more than 8% in recent days. As soon as momentum slows, the share threatens to fall back into a downtrend. The 2022 travel season is not yet in the clear.
Barsele Minerals: Gold and a special constellation
Little is in the bag at Barsele Minerals so far. As a reminder, the Company operates the advanced Barsele gold project in Sweden with Agnico Eagle. The Canadian mining group believes in the project in Sweden but has set its sights on North America as its field of future operations. Barsele Minerals, at the same time, is looking to turbo-charge and aggressively explore its namesake project. "We are convinced that we could unlock great potential with a drilling program of about 35,000 meters. However, to fund this, we need a decision. Fortunately, there are already interested parties who can imagine taking Barsele forward together with us," Barsele CEO Gary Cope said in an interview late last year after the preliminary purchase agreement concluded months earlier with Agnico Eagle for the complete takeover of the project was terminated.
Currently, both parties continue to work on the Barsele project. In January, workers even discovered a previously little-known gold-bearing boulder. With spring approaching, things are also getting exciting around Barsele Minerals: Will the Company succeed in taking over the project completely? Will a new partner come in and finance what management sees as a promising 35,000-meter exploration program? These are the questions shareholders and interested parties are asking themselves these days. The project appears promising given the low energy costs, intact infrastructure, and great importance for the region. The recovery in the share price since January also reflects this. However, uncertainty remains around Barsele Minerals. Since gold tends to be more in demand today than it was months ago and the team around Barsele Minerals is more than convinced of its project, there is still fantasy around the share. It will be exciting to see whether the Company can soon resolve the current deadlock.
BYD: Electricity storage is gaining in importance
Over the past three months, BYD's share price performance is not that promising - the share fell by around 15%. But how much of the share price setback can be attributed to the Company, and where did the nervousness in the overall market have an impact? BYD is an ambitious automaker and battery specialist. The Company even has its own chip division. When many homes in Germany complete the energy transition in the coming years, electricity storage systems from BYD are also likely to play a significant role - in combination with heat pumps and photovoltaic systems, the technology is seen as a major step towards self-sufficiency. Because of the high electricity prices and subsidies, the move is also worthwhile for all those who currently still have some money to spare. Even if BYD is facing more and more headwinds due to the growing competition from established brands in the field of cars, the Company is well-positioned - especially under the hood, i.e. in battery technology, the Chinese are playing to their strengths. However, the market skepticism about China currently speaks against the value. Because of the growing geopolitical tensions, this skepticism could persist on the market for a while.
Both TUI and BYD are well-positioned to continue earning good money in the current fiscal year - but uncertainties remain. While the tension around Barsele Minerals is also evident, the Company is not dwindling its market share, nor can it fall behind technologically. As long as gold remains attractive, the Barsele project must also be considered promising.
Conflict of interest
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