Defense and commodity stocks continue to offer attractive investment opportunities. Geopolitical tensions, such as those currently in Venezuela, as well as the war between Russia and Ukraine, are providing companies in the defense industry with a sustained economic boom. Critical raw materials are also geopolitically significant. These resources, along with secure supply chains outside China, carry great weight for both companies and states. We explain why the companies listed above benefit from this overall constellation.
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Almonty Industries – A pure success story
The shares of the world’s largest tungsten producer outside China performed phenomenally well last year. Tungsten is an important critical raw material that is essential for the defense industry and high-tech sector. With the start of production at the Sangdong Mine in South Korea, Almonty (TSX:AII) is supplying exactly what is urgently needed in the Western Hemisphere: large deposits from a secure jurisdiction.
The world-class Sangdong deposit is of exceptional quality and promises a long life. Demand for tungsten is rising steadily, not only from companies but also increasingly from governments. Export restrictions by the People’s Republic and continued purchases on the market have led to a significant increase in the price of tungsten.
In addition, and particularly good for shareholders, is the Sangdong mine design. The facility was designed to enable profitable operation even in a low-price environment. The current price level is at least twice as high and promises high profitability with enormous margins. The modern facilities put Chinese competitors at a disadvantage. According to the Company’s assessment, it has at least a 10-year lead over the competition.
In recent months, Almonty secured its presence in a key region with the acquisition of an advanced tungsten project in the US state of Montana. Existing permits and good infrastructure enable a quick and capital-efficient start of production, which is expected in the second half of 2026.
Apart from the new production site, the United States plays a crucial role for Almonty. The Company, previously based in Canada, has relocated its headquarters to the US. Even more importantly for investors, the Nasdaq listing provides Almonty with greater visibility and broader access to capital.
At the end of 2025, the Company carried out a capital increase, which was in high demand and oversubscribed. Under the leadership of Bank of America, USD 129 million was placed at a price of USD 6.25, and the shareholder base was expanded to include long-term institutional investors from the United States. Despite the phenomenal run last year, analysts still have high hopes for the shares. Cantor Fitzgerald set a price target of USD 10, while Oppenheimer set the bar even higher at USD 12.
TKMS – Full order books set the direction
The German manufacturer of submarines and naval vessels has good growth prospects. Order intake increased sixfold in the last financial year. As a result, order books have grown to a remarkable EUR 18.2 billion. In terms of revenue, the spin-off from the thyssenkrupp Group, which only went public last October, achieved a value of EUR 2.2 billion. This contrasts with a current valuation of EUR 4.6 billion. In the medium term, the operating EBIT margin is expected to increase from 6% to 7%.
The newcomer to the stock market stands out positively in terms of free cash flow generation, most recently, EUR 784 million, and its shareholder-friendly distribution policy. TKMS allows investors to participate in the Company’s success with a dividend payment of 30 to 50% of the profits generated. Analysts’ assessments of the share price potential are increasingly diverging. While Deutsche Bank experts recently raised their price target to EUR 82, Bernstein estimates the fair price level at EUR 67.
Salzgitter – Several price drivers
The Company is one of the largest steel companies in Europe and is also active in the fields of special-purpose machinery and plant engineering. Its core business comprises the manufacture and further processing of rolled steel and tube products, as well as trading in these products. Its annual capacity is an impressive 7 million tons of crude steel.
Last year, Salzgitter shares ranked among the top performers in the mid-cap sector. The share price increase was driven by several factors. In addition to the prospect of rising steel prices and the hoped-for steel protectionism of the EU, the strong increase in value of the share package in copper producer Aurubis also played a particular role.
The certification of a high-strength protective steel for the defense industry in the summer had a clearly positive effect. This steel can now be used in military applications. This creates an additional growth opportunity for the group, which can now supply the steel directly to defense companies and the German armed forces.
The conditions for further price increases in the defense and raw materials sectors remain favorable. The growth prospects of tungsten producer Almonty are particularly noteworthy, with strong demand, rising prices, and increasing sales volumes pointing to high future profits. Additionally, the Nasdaq listing enables greater visibility and broadens investor access, which should support the stock’s valuation. Analysts remain bullish. Analysts remain bullish. Most experts also expect further price gains for Salzgitter, while assessments for TKMS are becoming increasingly mixed.
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.
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