March 29th, 2022 | 12:18 CEST
TUI, ThyssenKrupp, Desert Gold, Barrick Gold - Shares with 100% turnaround potential!
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"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
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 very dynamic - Barrick & Co shortly before the breakout
When the crisis broke out at the end of February, gold shot up by USD 150 in a 5-day movement. As if out of nowhere, it was there - the need for hedging. Investors remembered the value-preserving effect of precious metals and put gold, platinum and silver up by 5-10%. In parallel, the well-known gold protagonists Barrick, Newmont, Agnico and Harmony each rose by 10-20%. Here, the leverage effect of the mining stocks came into play. However, as with the precious metals themselves, the mines also corrected similarly by 10-20% as the technical correction in the commodities sector set in. Within 48 hours, the technically overbought condition was leveled out again, and the yellow metal fell back to USD 1,920. However, from a chart perspective, both precious metals and mine producers are on the verge of a major breakout. Stay invested.
Desert Gold Ventures - A promising resource estimate is now available
Canadian explorer Desert Gold Ventures (DAU) still has a little way to go before production. In early March, there was a NI 43-101 standard prospective resource estimate of 769,200 ounces of gold. That was based on the definition of a proven mineral resource of 310,300 ounces of gold at the Mogoyafara South gold deposit of the SMSZ project.
The Canadians' flagship project is the 410 sq km SMSZ project in Mali, close to the previously mentioned Barrick Gold. The next steps in 2022 include an exploration program comprising approximately 20,000 meters of drilling. The necessary financing steps will be carried out in a time-dependent manner according to the required work plan. The focus will be on the Mogoyafara South and Gourbassi West North zones, as these two gold-bearing systems suggest the largest deposits in the concession area.
The current 150 million DAU shares are trading between CAD 0.12-0.14. At this point, the Desert price has already managed to break out strongly to the upside once. This time, too, the chances are not bad because the increased gold price could also give the deposits in the ground a higher valuation. If the gold price increased by about only USD 200, the expected appreciation potential would be 100-150%. So an initial investment at this low level makes perfect sense.
TUI - First Corona, now a senseless war
Tour operator TUI has many stress points, which is why the share price is also trading near its long-term lows. On the one hand, the business has been affected by the Corona Crisis for several months. On the other hand, the Company's financing depends on a stable relationship with major Russian shareholder Alexei Mordashov, who holds 34% of TUI.
Shortly before sanctions against Russian oligarchs took effect, Mordashov transferred nearly 29.8% of his shares to a Caribbean holding company called Ondero, which in turn is owned by Mordashov's wife, Marina. As a result, the shares, believed to be locked up, could also return to the market. An unpleasant sword of Damocles for TUI if the Russian oligarch had to liquidate ad hoc because of the freezing of other assets.
Such deductions are still speculative. The fact remains that the warlike actions in Eastern Europe are also dampening booking activities in the travel business. The exploding fuel costs also have a negative impact, as they are fully reflected in airfares. Not a good set-up for TUI, but there's no reason to bury one's head in the sand. Because technically, it looks like a long-term bottoming out if the zone at EUR 1.80 to EUR 2.05 is not sustainably undercut.
ThyssenKrupp - Focus now shifts to the marine division
In our last analysis on ResearchAnalyst.com, we saw good progress for ThyssenKrupp in the Group's restructuring and a long-term improvement in the figures. But now ThyssenKrupp is shocking us by suspending its cash flow forecast. The reason: Strong uncertainties in the steel and automotive businesses due to permanently disrupted supply chains!
As a result, the stock has slumped by 10% and given back the recent recovery gains. Analysts at DZ Bank see a sharp increase in operating risks, have revised their earnings estimates and lowered the price target from EUR 14 to EUR 12. LBBW is equally displeased, having adjusted the fair value from EUR 10.30 to EUR 7.00.
In the current environment, the plan to spin off the steel business is unlikely to work out, but we do see a reason for hope due to the improvement in the marine division (TKMS). TKMS has capacity utilization for years to come; the shipyard is building two submarines for the German navy and four more for the Norwegian navy. The order volume is around EUR 5.5 billion, but the planned delivery will not be until 2029. That puts the focus back on the insolvent MV shipyards in Wismar and Rostock. Here ThyssenKrupp could show its colors to the insolvency administrator and buy additional capacity at a favorable price.
The TKA share should be kept on the radar; perhaps the Group can tap into the EUR 100 billion budget of the German armed forces. It is currently trading at 50%, well below book value and technically, the EUR 7.50 to EUR 8.20 zone forms strong support. It should remain exciting around ThyssenKrupp, even if the occasion truly offers no reason to rejoice.
The geopolitical uncertainty is creating a high need for security among investors. Precious metals have historically proven that they can fulfill this objective. In addition to the standard stocks, explorers such as Desert Gold can also make sense if the measurement data promise high deposits. TUI and ThyssenKrupp are currently interesting turnaround speculations.
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