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May 3rd, 2022 | 13:01 CEST

BASF, Meta Materials, NIO - New opportunities through the correction

  • metamaterials
  • Technology
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Whether the old stock market rule "Sell in May and go away" still applies this year is at least doubtful. The DAX and S&P 500 benchmark indices have lost more than 10% since the beginning of the year. The Nasdaq technology segment was hit harder, losing more than 20%. Concerns about further interest rate hikes, the threat of stagflation and uncertainties regarding the Ukraine conflict are causing investors to go on a buyers' strike in some cases. Nevertheless, there are good long-term, anticyclical entry opportunities at current levels.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: BASF SE NA O.N. | DE000BASF111 , Meta Materials Inc. | US59134N1046 , NIO INC.A S.ADR DL-_00025 | US62914V1061

Table of contents:

    Meta Materials - Breakthrough technology

    Companies with new, innovative technologies are subject to high volatility at the beginning of their trend. Similar to Yahoo and Amazon at the end of the last millennium or Google, the share price of Meta Materials is also being shaken back and forth vigorously. While the "Lux Research Innovator of the Year 2021" share was still at USD 2.17 at the beginning of March, four weeks later, it is almost 50% lower at USD 1.21. From an operational point of view, everything is still going according to plan. Meta Materials' products can be divided into three areas: holography, lithography and wireless sensor technology with strong IT networking and artificial intelligence embedding. The developer of high-performance functional materials and nanocomposites produces specialized coatings capable of redirecting light, sound, heat or radio waves using specialized nanotechnology. It enables leading global brands to deliver consumer electronics, 5G communications, health and wellness, aerospace, automotive and clean energy products to their customers.

    Nanotech Security, acquired in 2021, provides Meta Materials with a nano-optical technology that has security features to protect against counterfeiting of government documents and currency and authenticate brands. As a result, USD 2.2 million in acquisitions could be made from an undisclosed central bank. According to the framework agreement, the volume could increase to a total of USD 41.5 million over the next 5 years.

    The acquisition of Plasma App in a USD 20 million stock transaction puts Meta Materials in an even better position strategically. "This is a strategic acquisition for META that combines the best nanostructuring technologies with the best coating technology. PLASMAfusion is a versatile coating platform technology that we believe will enhance our existing manufacturing processes, expand our IP portfolio, and open new markets," said George Palikaras, President and CEO of META, who will also appear at the IIF on May 19.

    The market for metamaterials is growing rapidly. Meta Materials is perfectly positioned due to its extensive portfolio of 247 patents in 65 patent families. Its market capitalization has melted down to EUR 335.25 million. In the long term, a sustainable bottom could form at current levels.

    BASF - New low for the year

    With a decline of 6% and the opening of a large price gap to EUR 47.12, the chemicals group from Ludwigshafen danced into May, and at the same time, to a new low for the year. However, the low of March 7 was successfully recovered so that a double bottom would be in place from a chart-technical point of view.

    Moreover, the sell-off is not due to negative news but the dividend discount of EUR 3.40. Last week, BASF reported its final figures for the first quarter of the current fiscal year 2022 and exceeded most analysts' estimates. Compared to the first quarter of 2021, sales rose by EUR 3.7 billion to EUR 23.1 billion. The main reason for the sales growth was higher prices, especially in the Chemicals and Materials segments.

    Major Swiss bank UBS lowered its price target for BASF from EUR 58 to EUR 52 but kept its rating at "neutral." Likewise, analyst firm Jefferies sees less potential for BASF shares. After the full quarterly figures, the target was lowered from EUR 74 to EUR 64, but the analysts maintained their "buy" rating.

    NIO - Hard impact

    The Chinese electric car company NIO suffered a sharp decline in its delivery figures for the month of April. The Company managed to deliver 5,074 vehicles, 29% less than a year ago and one of the lowest results in recent months. Compared to the month of March, deliveries crashed by 49%. The reasons were supply chain volatilities and other constraints caused by a new wave of COVID-19 outbreaks in certain regions of China.

    According to the website, NIO is also rumored to be planning several new models, including one codenamed Aries. The Aries could be an ES8 model based on NIO's NT 2.0 platform. According to one auto blogger, NIO is also planning several other models, including the EC7 and a hatchback version of the ET5. No new model was launched last year. Chart-wise, no investment in NIO is pressing at the moment. There is still a gap to close at USD 15.80. A break below USD 16 also threatens a test of the low for the year at USD 13.01.

    The stock market is showing a weak performance in the current year due to geopolitical and monetary uncertainties. As a result, some shares are already at an attractive level in the long term. BASF's price targets were cut by analysts, while NIO's sales figures fell drastically. After a sharp drop in the share price, Meta Materials, on the other hand, is tempting investors to make a speculative purchase.

    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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