January 5th, 2022 | 09:22 CET
A portrait of three hot stocks: Rock Tech Lithium, Nevada Copper, Porsche
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"[...] If we pursue our goals conscientiously, the market will adjust its valuation accordingly, I am sure. Often, all it takes is a trigger. [...]" Ryan McDermott, CEO, Phoenix Copper
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Rock Tech Lithium: An old acquaintance returns
Ever since Rock Tech Lithium announced its intention to build a factory in Brandenburg as a neighbor of Tesla, the stock has been the talk of the town in Germany. We already portrayed the value last April. In the meantime, the share has become one of the most popular lithium stocks. In October, the share made it to EUR 7 but then lost ground and crashed to EUR 4. In the meantime, however, the share has stabilized and is again scratching the EUR 5 mark. Recently, Rock Tech Lithium successfully closed a financing tranche. With the funds collected, a lithium hydroxide converter and a refinery plant are to be built at the Georgia Lake site in Ontario, Canada.
In parallel, lithium prices also skyrocketed: at the end of 2020, a ton of lithium carbonate in China reached a price of almost USD 42,000, as reported by the Benchmark Minerals data service. Last March, Rock-Tech-Lithium-maker Dirk Harbecke expressed himself confidently in an interview with Kapitalerhoehungen.de: "Even if our economic planning is not yet ultimately completed, we expect, all things considered, to be in the black already from 7,500 dollars", the CEO said at that time. Even if the market is already pricing in a rosy future for Rock Tech Lithium, the share remains exciting.
Nevada Copper: Cyclical with reserves
While the market is cheerful about the lithium hopeful, market expectations for the US copper producer Nevada Copper seem rather gloomy. The share is bobbing around EUR 0.50 and thus at the 52-week low. In the same period, the share reached a level of EUR 2.36 but then slipped again. Nevada Copper is currently building its Pumpkin Hollow mine in the US state of Nevada. Tesla also has factories in the region. Most recently, work has been proceeding apace: "The Company continues to build on the operational improvements made over the past two quarters to further accelerate the development and production ramp-up," said President and CEO Randy Buffington at the end of 2021. "The introduction of additional equipment, labor and operational efficiencies resulted in the highest development rates achieved this year."
After a year of repeated rounds of financing, which included participation from Germany's KfW, Nevada Copper could be headed straight toward production in 2022. Two investors, Solway and Mercuria, came on board during the past financing rounds. Both hold 10.4% of the shares and have committed themselves to advancing the gigantic Pumpkin Hollow project, which includes a permitted open pit mine in addition to the underground mine currently under construction. Although the share price has currently fallen back significantly, the stock has always been good for dynamic price jumps in the past. Thanks to the new investors, the time of negative surprises should be over. Speculative investors should keep the stock in mind.
Porsche: Above EUR 100, the torque rises
While Rock Tech Lithium and Nevada Copper are mining key raw materials for electromobility, sports car manufacturer Porsche is one of the companies driving demand for lithium and copper. The sleek cars from Zuffenhausen have long been a lot of fun on electric power. At the beginning of December, the share price rose significantly in the wake of speculation about a share swap by the Porsche / Piëch family from Volkswagen to Porsche. In the meantime, however, the situation has calmed somewhat. Beyond EUR 93.40, the share could make another attempt to reach the EUR 100 mark. Above that, the share could advance into a completely new area. The brand is strong, and Porsche is also well positioned in e-mobility. However, the Porsche on the road is still more fun than the Porsche share in the portfolio.
When investors compare hot stocks around e-mobility, they find different investment stories: It is all there, from established companies to up-and-coming newcomers or genuine cyclicals. Nevada Copper must be considered extremely cyclical based on its historical share price performance, but this cyclicality offers opportunities precisely when it succeeds in buying at the bottom. Operationally, the Company is on a good path - the chances for 2022 are not bad.
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