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December 18th, 2023 | 07:00 CET

Volkswagen, Desert Gold Ventures, Morphosys - Position for the rebound

  • Mining
  • Gold
  • Electromobility
  • Biotechnology
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Last week's interest rate decision in the USA was the final starting signal for further price rises. In addition to equities, gold, silver, and several cryptocurrencies also shot up. Therefore, the last weeks of the year should end with further positive signs. Despite the record high in many indices, there are increasing rebound opportunities that could outperform the broad market in the near future.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    Volkswagen - Ray of hope in November

    Despite an almost unchanged share price of EUR 116.00 compared to the beginning of the year, the stock market year was more than challenging for the Wolfsburg-based automotive giant. In the first quarter, the company had to relinquish its market leadership in China, a position it held since the 80s, to BYD. Even more painful is the fact that the "Build Your Dream" company achieved this with purely electric vehicles, while Volkswagen missed out on the transformation from combustion engines to electric vehicles in the initial years.

    Further bad news came at the end of October with an adjustment of forecasts. The reason for the reduction was the effects from commodity hedging transactions in the first three quarters, which could no longer be made up for in the final months of the financial year. According to current estimates, the adjusted operating result should now be at the previous year's level of around EUR 22.5 million. In the third quarter, this amounted to around EUR 4.9 billion. Group sales rose by 12% to EUR 78.8 billion in the first nine months, with an operating return on sales of 6.2%.

    The recently published sales figures for the month of November had a positive effect. China, in particular, was able to shine with an increase in sales of 32.4% to 296,100 cars compared to the same period last year. Globally, 824,300 vehicles were sold in November, 22.6% more than in November 2022. 26 analysts covering Volkswagen shares on Reuters Refinitiv see an average price target of EUR 137.00.

    Desert Gold Ventures - Optimistic into the new year

    Despite the all-time high of USD 2,146 that the gold price has reached, investor interest in smaller exploration companies remains low. But beware, should the base price march northwards on a sustained basis, smaller gold mining shares, in particular, will act like warrants on the development of the gold price. Interested investors should, therefore, seize the opportunity now to take a closer look at companies such as Desert Gold Ventures.

    The Canadians are focusing their activities on Mali, where they own the 440 sq km SMSZ project in the Senegal-Mali shear zone of the same name. In the immediate vicinity of the area, there are already producing mines owned by major players such as Barrick Gold, Endeavour Mining, and B2Gold. In addition, Allied Gold's Sadioka mine is directly adjacent to the property explored by Desert Gold Ventures.

    In the first quarter, Desert Gold Ventures conducted a program of 445 drill holes with a length of 2,067 meters. To date, the property has Indicated Mineral Resources of 310,300 ounces and Inferred Mineral Resources of 769,200 ounces of gold. A much more extensive program with a total of 30,000 meters of drilling is planned for the coming year.

    Furthermore, the management around CEO Jared Scharf is in negotiations with potential strategic partners to finance the feasibility study and mine development. Production could start in the second half of 2025. If this timeframe is met, the current market capitalization of CAD 8.78 million is likely to be significantly surpassed by far.

    Morphosys - Consolidation after the hype

    Without question, the biotech company has been one of the high flyers on the stock markets in recent weeks. With a performance of 130%, the share price shot above the resistance level of EUR 32.39, marking a new high for the year. The reason for the extraordinarily positive development was recent results from the Phase III study with its most important hopeful drug, pelabresib. A mixture of pelabresib and ruxolitinib, the current standard therapy for the rare, malignant bone marrow disease myelofibrosis, showed an improvement in all disease characteristics compared to a placebo in combination with ruxolitinib.

    The Munich-based company used the jump in share price to secure sufficient cash via the pelabresib approval decision in mid-2025. Morphosys placed a total of 3.4 million shares with institutional investors at a price of EUR 30, which equates to gross proceeds of EUR 102.70 million.

    At the current level, Deutsche Bank Research is somewhat skeptical about Morphosys and the capital increase that has now been carried out. The target price was repeated at EUR 25, and the investment rating remains "Hold".

    The automotive giant Volkswagen may have heralded a rebound with its improved sales figures for November. This rebound is already underway at Morphosys, with a price jump of over 130% since mid-October. Desert Gold Ventures could be on the verge of a breakthrough next year with the start of a major drilling program and the submission of the feasibility study.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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