11. June 2021 | 08:26 CET
Varta, MorphoSys, Theta Gold Mines - Strong tailwind from politics!
As an entrepreneur, it is a particular challenge today to find business models that will come into political focus in the near future. We had this at the turn of the millennium in mobile communications when licenses were sold for future generations. In the meantime, there have been important changes in infrastructure and energy policy - one man's joy is another man's sorrow - and now the government is considering the expansion in the direction of climate protection, only approving new houses with mandatory solar installations. Another major intervention, but certainly in the right direction!
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ISIN: DE000A0TGJ55 , DE0006632003 , AU0000035701
"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
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.
Varta - On the way up again
Varta is becoming an expert in a wide variety of battery systems. Wireless headphones, batteries for drills and robotic mowers, power for insulin pumps and for measuring devices in industry - all this would hardly be possible without technology like that from Varta. And batteries for electric cars are also expected to roll out of the factory halls soon.
The lithium-ion batteries made by the Baden-Württemberg-based Company are becoming a perennial favorite. In the recent past, they have benefited from the boom in the wireless headphones business. Tech giants like Apple and Samsung power their devices with Varta button cells. The Company has also recently been working on so-called smart labels, where the battery is printed directly on paper. Printed lithium-ion cells are also in the works, for example, for intelligent skin patches on the wrist to monitor bodily functions.
However, the biggest source of hope at present is probably the electromobility business. In March, the MDAX-listed group announced its entry into the production of batteries for electric cars. Innovative cells are to be produced on a pilot line at the Company's headquarters in Ellwangen by the end of the year. The Company has already landed its first customer from the automotive industry but has given no name. If everything goes as planned, the business with the automotive sector could provide the group with the next big growth spurt.
After a short phase of weakness up to EUR 108, the Varta share has sparked a new price surge and quickly climbed above the EUR 130 mark. From a chart perspective, the old highs at EUR 160-180 are now on the agenda again. The necessary operating figures must come in; otherwise, it will not work.
MorphoSys - Giant takeover in the USA needs to be digested
MorphoSys AG is planning to buy the US Company Constellation Pharmaceuticals Inc. for the equivalent of EUR 1.4 billion. The Bavarian-based biotech announced an agreement to acquire Constellation for the equivalent of EUR 24.80 per share in cash, which represents a total equity value of EUR 1.4 billion, according to the Company. It is expected to be completed in the third quarter of 2021.
In addition, MorphoSys will enter into a long-term strategic financing partnership with Royalty Pharma plc. The agreement, subject to certain conditions and upon closing of the transaction with Constellation, provides, among other things, for the following: Royalty Pharma will make an upfront payment of EUR 1.17 billion to MorphoSys to support the Company's growth strategy. The proceeds will be used to fund the acquisition of Constellation and to develop the combined pipeline further.
Constellation is a clinical-stage biotech company focused on epigenetics. It develops new cancer drugs. Its two lead product candidates, Pelabresib, a BET inhibitor, and CPI-0209, a second-generation EZH2 inhibitor, are in mid to late-stage clinical trials. With this, MorphoSys is making a giant leap.
Initially, the stock market reacted somewhat huffily to the news. Unfortunately, there are no examples of successful German takeovers in the USA, for instance, Daimler-Chrysler or Bayer-Monsanto. Even though it is a barrel of money in the short term, the deal should pay off in the long term. The MorphoSys share has already digested the shock somewhat and is trending back towards EUR 70. We recommend increasing the holdings.
Theta Gold Mines Ltd. - A new star from Australia
In times of high stock prices and rising inflation figures, investors naturally look towards stability and preservation of monetary value. Gold stocks have compensated a large part of inflation in the past because precious metals are not multipliable like other economic goods. In this note-banked environment, smaller explorers and mines are receiving varying levels of investor attention depending on the stage of development of their projects.
We have focused on a new stock, Australia's Theta Gold, as production of the yellow metal in South Africa is on the horizon as early as 2022. The Company owns over 62,000 hectares of gold mining claims and 43 historic properties, most of which are located within the Eastern Transvaal Gold Fields northeast of Johannesburg. Exploration is directed at high-grade, near-surface gold reef deposits at the Pilgrims Rest and Sabie Gold Fields, 350km from South Africa's largest city.
The Company has recently brought on board some ex-Harmony Gold experts. The latest exploration from April indicates a suspected resource of 684,000 ounces of gold, with initial plans calling for production from 2022. The low production costs are remarkable; they are only about USD 950. A pre-feasibility study for underground mining was completed in mid-April. There should be more news here shortly.
Theta Gold shares have also recently started trading in Frankfurt, with more pieces naturally circulating on the parent exchange in Australia. Due to the manageable time until the start of production, Theta should immediately respond to an upward trend in the gold price.