October 20th, 2021 | 12:17 CEST
TUI, Diamcor Mining, Varta: Luxury that pays off
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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: Chart technically in no man's land
Especially after the Corona period, many millions of Germans have the desire to travel again. The Black Forest and the Baltic Sea are nice, but summer, sun and beach in the middle of Germany's grimy autumn are nicer. Therefore, some more travelers are likely to get on the plane this year and fly far away. Although even an expensive vacation is over quickly, beautiful memories sometimes remain forever. Tour operator TUI is benefiting from the fact that travel satisfies people's inner longing. A year ago, the Hanover-based Company still suffered from the pandemic, but things are looking up today. Although sales fell significantly by 89% in the first half of the year, the losses of EUR 1.3 billion were kept within limits given the particular situation. About a year ago, the market had feared worse. In the meantime, analysts even see TUI's losses as an indication that cost-cutting measures are taking effect.
In general, TUI has become a leaner company during the pandemic, which can react more quickly to changes. Anyone who switched to the home office within days and made a virtue out of necessity can no longer be shaken so quickly. What may have unsettled employees in recent months also has a positive side. This view may seem cynical, but TUI employees can certainly look positively to the future. Already in the summer, the Company expanded its offering to include new tours in Greece. The discussion about an end to the Corona emergency in Germany is also likely to drive more people willing to travel to travel agencies or the relevant websites. Although TUI has not achieved anything on a three-month horizon, the Company should still have the worst behind it. However, a turnaround only beckons beyond EUR 3.50. The share is not interesting for short-term investors.
Diamcor: Rare opportunity around diamonds
While TUI is a boring but rather down-to-earth stock, the situation with Diamcor Mining is quite different. The Company is one of the few listed diamond producers, and its strategy is to invest in diamond projects that can be put into production in the short term. Diamcor's prime project is the Krone-Endura project, located in the neighborhood of the well-known Venetia mine of the diamond giant De Beers. The property is currently only exploited to a small extent, which indicates further potential in the future. The fact that the Krone-Endura project offers quality at the highest level is also indicated by the supply agreement that Diamcor Mining has concluded with Tiffany & Co. from Canada. The jewelry company has access to 100% of Diamcor's production at current prices. For Diamcor, this provides good predictability and the potential for further business.
Just recently, Diamcor delivered 2,521.17 carats of rough diamonds to customers. In parallel, the Company is working on further reducing costs and delivering more diamonds soon. The share price performance is characterized by regular spurts. In the meantime, the value has remained broadly stable. Investors who want to add an exciting diamond growth story to their portfolio should take a closer look at the share. With a market capitalization of around EUR 20 million, the value is still very small and thus suitable for surprises.
Varta: Where is the fantasy?
Battery Company Varta is far from a surprise - it now seems as if word of the e-car plans of the specialist for button cells has spread to almost every private investor. As a result, the share is currently attracting hardly any investors. Most recently, the share price has been swinging back towards EUR 130, but the upward fluctuations are becoming smaller and smaller. Analysts with price targets just above EUR 100 did not exactly provide for high spirits. The Varta share is likely to rise in the future whenever e-mobility is in particularly high demand on the market, but new highs currently seem to be a long way off.
While the shares of Varta and TUI are currently in no man's land in chart terms, Diamcor has an intact upward trend. Although the share has already risen sharply, this is nothing unusual for a developing small-cap. As the Company is growing faster than planned, further surprises could be in store.
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