May 30th, 2022 | 11:57 CEST
Turnaround stocks: Amazon, TUI, Desert Gold, Deutsche Bank - Easily 100% in it!
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"[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.
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 fights its way up - Desert Gold Ventures looks promising
At USD 2,070, gold marked a temporary 11-year high at the start of the war. However, it fell steeply back to USD 1,780 immediately afterwards. In the meantime, however, the spot price has been fighting its way up day by day. At the end of May, the USD 1,870 mark was reached again. Technically, this area is the last stop for a further movement towards USD 2,000, which could now be imminent.
The Canadian explorer Desert Gold Ventures (DAU) still has a short way to go until production, but at the beginning of May, the Company raised CAD 1.4 million in additional funds for the next drilling programs. Last March, a NI 43-101 standard resource estimate of 769,200 ounces of gold was found. It 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 project is progressing well, and its value depends on the outcome of the next exploration. In 2022, drilling is expected to add close to 20,000 meters. If the resource estimate can be increased as a result, the stock market valuation will automatically rise.
Most recently, at CAD 0.07, the share was able to show a countermovement in the direction of CAD 0.10, and sales also increased noticeably again. The current 161 million DAU shares only amount to a market capitalization of CAD 14.5 million or a good EUR 10 million. In the current environment, the chances are not bad that both the gold price will pick up and Desert Gold will also be able to report positively. At this level: Mix it up!
TUI - Is the capital increase now digested?
The last capital increase at TUI has caught supporters of the tourism share on the wrong foot. Since the last placement with institutional investors, the share price has lost a full 20%. The process of deleveraging is also still fraught with major risks. The proceeds from the issue of the new shares and further cash from the good spring business are now to be used to repay one of the two silent participations of the Economic Stabilization Fund (WSF) with a volume of EUR 671 million.
This is risky from a balance sheet perspective, as there are already clouds of trouble looming on the horizon. Having just emerged from the Corona hole, the booking season for summer 2022 is still going quite well. However, according to a survey by the major German daily newspapaer, BILD, around 70% of Germans want to save heavily on their next vacation. Inflation is causing a lot of trouble for most TUI customers, i.e. travelers with an average income and an annual vacation. According to the survey, 16% of Germans are foregoing their summer vacation altogether because of private savings, and around 48% want to cut back moderately to heavily. Only about 32% of those surveyed said they would leave everything as it was; vacation is not on the list of cuts for the time being. All in all, if more than half of Germans are spending less money on the most beautiful time of the year, then the signs for TUI are pointing more to a decline in sales than to growth.
At EUR 2.19, the TUI share is trading just before its arithmetical lows of around EUR 1.95. If the survey proves true, the debt burden totaling EUR 3.9 billion could become a problem in the medium term, as the market capitalization of equity is only just above the debt level. Further capital increases will therefore become increasingly difficult. Very speculative!
Deutsche Bank and Amazon - With good technology and split into the next upward move
Two shares worth a closer look in the next few days. In the case of Deutsche Bank, the renewed technical turnaround in the area of EUR 9 tempts upwards. As a result, the value was able to increase by a full 10% in the last week alone. In chart terms, momentum is building up, which can pull the value up to the range of EUR 11.80 - 12.50, a quick 13 to 20% opportunity from the current level. Operationally, one looks at the large bank stocks on the interest rate development. In Europe, there could already be the first increase on the part of the ECB in July, which is clearly a sign of the strong inflation movement. While the monetary guardians are looking at the euro's stability, the interest margin in the lending business of the banks is improving noticeably. Deutsche Bank shares currently have one of the best technical profiles in the DAX.
Amazon is facing a historic split in June. With a ratio of 1:20, investors will receive a further 19 free shares for every Amazon share held. In purely arithmetical terms, the price would have to fall by around 95% into the EUR 105 to 110 zone. But who believes that? On the day of the last Tesla split, the share rose arithmetically by 20%. Whether it can do the same this time, of course, depends on the general stock market trend, especially for high-tech stocks on the NASDAQ. Last week, this had been able to put down an impressive rally of 1200 points or the equivalent of 10%. In the entire correction since January, the US technology market has already lost 30% of its value, and the big sell-off now seems to be over for the time being. The countermovement started just in time for the upcoming Amazon split at the end of last week. At the same time, the tech giant wants to spend about USD 10 billion on buybacks. The AMZN share should soon strike back.
Investors around the world continue to have a high need for safety. Inflation and rising interest rates are taking their toll on portfolios. After the significant correction, investors should invest in good quality stocks for the turnaround that will hopefully occur. Precious metals, Desert Gold, Deutsche Bank and Amazon, look good. The TUI share is visually low but currently only suitable for die-hards.
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