Close menu




January 4th, 2024 | 07:45 CET

Almonty Industries, Volkswagen, Rheinmetall: Which share will take off in 2024?

  • Mining
  • Tungsten
  • Electromobility
  • renewableenergies
  • armaments
Photo credits: pixabay.com

The new year has barely begun, and investors are looking for the winning stocks for the coming year. Investors should keep an eye on the critical raw material tungsten, which Almonty Industries produces. There is significant dependence on China and Russia in this sector. The areas of application are diverse and range from electric cars, which Volkswagen builds, to medical products, metal alloys, industrial applications, electronic devices and the defense industry, where Rheinmetall operates. In times of increasing conflicts and escalating trade disputes between the US and China, essential resources such as tungsten are increasingly coming to the fore. We look at which of the three shares could take off in 2024.

time to read: 4 minutes | Author: Armin Schulz
ISIN: ALMONTY INDUSTRIES INC. | CA0203981034 , VOLKSWAGEN AG VZO O.N. | DE0007664039 , RHEINMETALL AG | DE0007030009

Table of contents:


    Almonty Industries - Significant potential

    Almonty Industries already produces tungsten at its Panasqueira mine in Portugal. The mine is set to expand in the first quarter of 2024 and offers enormous potential with low risk. According to the completed feasibility study, this will increase throughput and provide access to high-quality material, nearly doubling tungsten production. The goal is to produce 124,000 metric tonnes of tungsten oxide (WO3) annually, extending the mine's lifespan by more than 20 years. Additionally, Panasqueira is rich in tin. The possibility of extracting other metals, such as tin and copper, is currently being investigated.

    Even more interesting for the Company is the Sangdong Mine in Korea, which is currently being developed. The project has been fully approved, construction is already well advanced, and financing of USD 75.1 million is being provided by KfW. In November, the next loan tranche amounting to USD 13.7 million was disbursed. The project is one of the largest tungsten deposits outside China. The lifespan of the mine is over 90 years, during which an annual EBITDA of CAD 72 million is expected. There is already an offtake agreement with Plansee GTP with a price guarantee of USD 235 per MTU. In addition, there is considerable potential from the underlying molybdenum deposit, which is also located on the property.

    The Sangdong mine is expected to provide up to 15% of the global tungsten supply once the mine has reached full capacity. Construction of the mine is due to be completed by the end of 2024. In addition to the two projects, there are two more in Spain. The current focus is on Portugal and South Korea. This will enable the Company to supply the battery industry, the semiconductor market and the defense industry, thus ensuring greater independence from China. The share has come under pressure due to slight delays in the construction of the Sangdong mine and fell from its high for 2023 of CAD 0.88 to CAD 0.42. The share is now trading at CAD 0.56 and is trying to break out of the sideways phase to the upside.

    Volkswagen - Fundamentally favorable

    The automotive industry could also boost demand for tungsten. Tungsten is becoming more important in the production of electric vehicle batteries, as it can improve their high energy density. Niobium tungsten oxide is the primary material used in batteries, which shortens charging times and increases power density. Volkswagen also wants to manufacture its own batteries in the future and has planned three gigafactories in Salzgitter, Valencia and St. Thomas. This will give the Company a production capacity of up to 200 gigawatt hours. At the end of last year, VW decided against a fourth site in the Czech Republic.

    The Group is currently in a transformation phase. The switch from conventional vehicles to electromobility requires adaptation. To position itself more efficiently for the future, the Company needs to streamline. This includes reducing jobs and downsizing the model range, as well as joint platform approaches to benefit from scaling effects. Around 20% of costs are to be saved at the Wolfsburg site. Development is to be accelerated, and ultimately, around EUR 10 billion is to be saved through these various measures.

    This should increase the return on sales from 3.4% to 6.5%. At least the allegations that forced laborers were employed in a joint venture in China have been refuted. From a fundamental point of view, the share is a clear buy with a price/earnings ratio of around 4. The question is rather where the growth will come from, as the market for e-cars is highly competitive, and VW cannot give significant price discounts with this return on sales. The question also remains as to whether the dividend yield of over 7% can be maintained at the current share price of EUR 111.10.

    Rheinmetall - Full order books

    Since the outbreak of the war in Ukraine, Rheinmetall has become the focus of investors. The share is running from one all-time high to the next. The EUR 300 mark was recently broken in Xetra trading. This is also driven by news such as a new record 2023 for approved arms exports by the German government. The Düsseldorf-based company will also have benefited from this. The Company itself says that it is growing dynamically and organically. To this end, the Group is internationally positioned and is considered a technology leader in some areas. Capacities are currently being expanded in order to increase turnover. The aim is to increase cash flow and profitability.

    Operationally, the Company is making good progress. Even in December, when things were quiet in many sectors, the Company announced one deal after another. It started with an order worth EUR 140 million from Ukraine for artillery ammunition. That was followed by a double-digit million order for electrical high-voltage coolant pumps. A state-of-the-art air defense system was ordered from Austria for EUR 532 million. The Hungarians have placed a development order for the Skyranger variant of the Lynx tank. Exhaust flaps for a double-digit million euro amount came from a customer in the commercial vehicle sector, and Romania wants to modernize its air defense system for EUR 328 million.

    The order backlog currently stands at EUR 26.6 billion. In the financial year, turnover will be around EUR 6.4 billion. The operating margin has risen to 11.8%. The Company will, therefore, be working at full capacity in the coming years. The capacity expansion in Hungary has been completed, and the first Lynx tank has rolled off the production line. Given the geopolitical tensions, Rheinmetall will likely be working at full capacity for some time to come. The dividend is expected to be EUR 4.30. A share in the Düsseldorf-based company currently costs EUR 296.80.


    Which share will take off this year? Almonty Industries could be due for a revaluation by the end of the year once the Sangdong mine has been developed and the expansion of Panasqueira has been completed. Volkswagen is likely to improve its figures next year due to the cost-cutting program. Fundamentally the share has catch-up potential. Rheinmetall is thriving but has already performed very well. Big jumps might be somewhat challenging.


    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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Juliane Zielonka on May 17th, 2024 | 07:00 CEST

    Almonty, Rheinmetall, Super Micro Computer - Commodity rally for defense and cloud

    • Mining
    • Tungsten
    • AI
    • Defense

    AI and defense stocks are setting the stock market on fire. Investors worldwide seem to have acquired a taste for artificial intelligence and defense. Wall Street is expecting a four-digit price target for Super Micro Computer soon. Rheinmetall is also enjoying full order books. Since the takeover of a Spanish ammunition manufacturer, production has also increased in this segment. Meanwhile, tensions between the largest economies, the USA and China, are growing enormously, which is reason enough for investors to take a look at Almonty Industries. The tungsten producer is on course for growth thanks to the restart of a mine in South Korea. Tungsten is rising in value as the increase in AI, and armaments are directly boosting demand for the rare earth metal. Who will win the stock market race?

    Read

    Commented by Fabian Lorenz on May 16th, 2024 | 08:00 CEST

    Share price shock at Siemens Energy! What are BioNTech and Cardiol Therapeutics doing?

    • Biotechnology
    • Pharma
    • renewableenergies

    The Siemens Energy share has been one of the surprises of recent months. It has more than doubled since the beginning of the year. Is a crash now imminent? Yes, if you believe Bernstein. Their analysts are shocking us with a horror price target. The Cardiol Therapeutics share performed even better than Siemens Energy in 2024. Despite the 150% rally, analysts see upside potential for the cardiovascular disease specialist. Things will get really exciting at the beginning of June when new study results are due. BioNTech, on the other hand, is currently failing to convince analysts. Reactions to the latest quarterly figures were modest.

    Read

    Commented by André Will-Laudien on May 16th, 2024 | 07:00 CEST

    Attention: Here we go! Hydrogen and uranium on the rise: Plug Power, Nel ASA, Kraken Energy and Siemens Energy in focus

    • Mining
    • Uranium
    • Hydrogen
    • renewableenergies
    • Energy

    It has finally happened! After months of sell-offs in hydrogen shares, there was a sigh of relief across the sector the day before yesterday. The reason: industry leader Plug Power received a government guarantee of USD 1.66 billion as backing for the construction of six-megawatt sites nationwide to create an initial hydrogen infrastructure. The Department of Energy (DOE) is thus demonstrating that the US is serious about investing in alternative energies. The decision boosted the entire energy sector, with uranium also continuing its recent upward trend. Where do the opportunities lie for investors?

    Read