The “Rambo Zambo” billions of Friedrich Merz continue to drive the Deutz share higher. After the solid annual figures, profit-taking seemed likely to set in for the engine manufacturer’s shares, but this was misinterpreted! Yesterday, analysts again raised the target price significantly! The Globex Mining (TSX:GMX) share is also performing strongly. The mining incubator is benefiting not only from the rising gold price, which remains solidly above the USD 3,000 mark. Will it crack the USD 3,500 mark soon? A deal has now been brokered with IAMGOLD. And what is Barrick Gold doing? After the recovery rally, it seems momentum has slowed. Now, a project is also being abandoned.
Globex Mining: Stock is headed up
One of the most exciting stocks in the gold and commodities sector is currently Globex Mining (TSX:GMX). It has been on an upward trend since September 2024, has already gained over 35 per cent in value this year, and is on the verge of breaking through the resistance level of CAD 1.60. The mining incubator’s shares are also traded on Tradegate.
The company impresses with broad diversification in the commodities universe, with over 250 projects – about half of which are in the precious metals sector, including gold, silver, platinum, and palladium – a consistently positive news flow that has been ongoing for months, and an ongoing share buyback program.
The most recent reported deal was with the gold company IAMGOLD Corporation. Globex has acquired royalties (1 per cent each) on the Porcupine West Gold, Eldrich Gold Mine, and Rouyn-Merger Gold Mine projects. Globex is paying around USD 350,000 to save on future royalty payments. All three properties are located in Quebec, Canada, and feature significant historical intercepts of gold mineralization.
Globex CEO Jack Stoch stated: “*We believe that by purchasing these royalty rights, we have enhanced the value of these prospective properties by eliminating the royalties. All three properties feature significant historical drill intercepts of gold mineralization and historical gold resources, and two of the properties have a history of production. *We believe all three properties hold significant gold mineralization potential.”** Stoch is a major shareholder in Globex and has a good track record. An interesting aspect of Globex’s business model is that the company does not finance the exploration of its projects itself but instead makes the properties available to others. In return, Globex receives, among other things, share options and royalty payments.
Barrick Gold: Air out of the stock?
While Globex Mining is on the verge of a new multi-year high due to positive news flow, not everything is yet in order at Barrick Gold. Although the stock of the gold-copper giant has also jumped in line with the rising gold price, its upside potential seems limited. The hope that a quick solution will be found for the important mine in Mali does not seem to be fulfilled. After rumors that an agreement was close with the local government, it has become quiet again.
Barrick has suffered a setback in expanding its gold resources in the Dominican Republic. Precipitate Gold, its local partner, reported that the final analysis report from Barrick Gold’s latest drilling phase did not show the expected results. As a result, Barrick is likely to terminate its 70 per cent purchase option for the Pueblo Grande project. No significant gold mineralization was detected in the three drill holes, so the geological concepts sought by Barrick’s exploration team could not be confirmed.
The Deutz share continues to ride the defense wave. After slight profit-taking on Monday, the stock picked up speed again yesterday. Since the beginning of the year alone, the engine manufacturer’s value has increased by over 70 per cent. Yesterday, the stock was again trading at over EUR 7, and analysts believe there is still significant upside potential.
Warburg Research raised the fair value for the Deutz share from EUR 7.60 to EUR 11.80 yesterday. Accordingly, the buy recommendation was confirmed. The positive annual figures show that the Cologne-based company has further upside potential. This means that the price target set by Hauck Aufhäuser has been exceeded. The analysts there had raised their fair value for the Deutz share to EUR 11.
Deutz has announced that it intends to benefit from Friedrich Merz’s “Rambo Zambo” billions in the defense and infrastructure sectors. Currently, the defense sector accounts for a relatively small portion of the company’s revenue. However, management has recently confirmed that it sees significant growth potential in this area. To leverage this opportunity, Deutz plans not only to strengthen its distribution in Germany but also to focus on engines for small and medium-sized military vehicles, including armored vehicles, rather than heavy battle tanks. For example, it already supplies engines for a Polish troop carrier. The company also aims to benefit from investments in infrastructure. Among other things, Deutz supplies engines for construction machinery.
Qube Research & Technologies Limited is betting on a falling Deutz share price. The company had most recently reported a short position of 1.10 per cent.
Armaments and gold continue to be driven by momentum. At Barrick, the air seems to have been let out for the time being as there has been no news about the solution to the problem in Mali. In contrast, Globex Mining looks set for further price increases. The newsflow is positive, and the stock is on the verge of a breakout. Deutz continues to ride the defense wave. Investors and analysts do not seem deterred by the billion-dollar valuation.
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