September 1st, 2020 | 05:55 CEST
TUI, SolGold and Klöckner & Co - Rediscovery with early warning
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Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
TUI AG - The start signal for share price recovery
The Corona crisis has hit the travel group TUI hard. It is hardly surprising that the share has lost around 60% compared with the same period last year. There are now signs of a recovery. Within a week the share price increased by 10%, within a month it was 5%.
The recovery is clearly linked to securing a sufficient financial cushion to survive the crisis. In mid-August, the company agreed with the German government on an additional stabilization package of EUR 1.2 billion. This package is linked to a number of conditions that must be met by September 30. KfW had already provided TUI with EUR 1.8 billion in April.
Last week, the company published the announcement that it intended to increase its capital. The TUI boss confirmed this yesterday: "We have to do something about the balance sheet, let's take a look at it". With the corresponding news flow, the TUI share should now have found its bottom. The starting signal for a continuing recovery has been given.
Klöckner & Co SE - The magic word is digitalization
As expected, Klöckner & Co posted losses in the first half of the year. The share price has roughly doubled since the Corona lows and yesterday closed Xetra trading at EUR 5.15. The SDAX Group is one of the world's largest producer-independent steel and metal distributors and one of the leading steel service center companies.
However, too many investors are still putting the stock in the wrong pigeonhole. Because as a pioneer of the digital transformation in the steel industry, the company is well on the way to digitalize the supply and service chains throughout and to develop the independent industry platform XOM Materials into the dominant vertical platform not only for the steel and metal industry but also for neighboring industries. The analysts of the Deutsche Bank formulate a price target of 6.70 EUR.
SolGold - It is not only gold that shines
SolGold is focused on the discovery and development of world class copper-gold projects in Ecuador. The company has been active in the country since 2012 and focuses on the Ecuadorian portion of the world's richest copper-gold belt, the Andean Copper Belt.
SolGold's flagship project is Alpala in the north of the country (SolGold ownership 85%). Alpala has a resource of 21.7 million ounces of gold, 9.9 million tonnes of copper and 92.2 million ounces of silver. According to a recent study (PEA), the project (NPV) is valued at USD 4.4 billion, after capital development costs of USD 2.7 billion, an IRR of 25.9% and a payback period of 4 years. The mine life is projected to be 55 years. These already impressive figures are calculated on the basis of a gold price of USD 1,300.00 per ounce. However, the precious metal is currently trading 50% higher. Copper has also risen sharply in value in recent months. The industrial metal is predicted to have a rosy future in view of the strong demand from the electric mobility sector.
SolGold is currently valued at around USD 650 million - in addition to Alpala, the company's assets include a further 13 projects. It is only a question of time when this valuation discrepancy will be resolved.
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