March 19th, 2021 | 07:05 CET
BMW, Nevada Copper, Nikola - The return of the giants!
Table of contents:
"[...] 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
BMW - New era
After Volkswagen AG revealed its plans on the occasion of the "Power Day," the Munich-based automotive group is following suit in terms of future prospects. At its annual press conference, BMW outlined its visions for the future. In 2030, at least half of BMW's global sales will be fully electric. In the current decade, ten million fully electric cars are to be put on the road. As early as 2023, the Bavarians want to offer at least one fully electric model in all major segments. For the current year, management is confident that both sales and profits will pick up again. The profit margin is also expected to double in a corridor between 6 & 8%.
The share, which has almost doubled since the Corona low last year, rose sharply after the statements and was up more than 5% at EUR 67.50. The share price was also up from the previous year's low. The next thick resistance zone is already at EUR 70. In the long term, we would currently prefer investment in Volkswagen AG.
Nevada Copper - Profiteer of the supercycle
The tidal shift in the automotive industry from combustion engines to electric cars increases the demand for raw materials enormously. While vehicles with combustion engines contain 18-49 pounds of copper, hybrid electric vehicles have about 85 pounds. Battery electric vehicles contain an incredible 183 pounds of copper. However, the problem is that there are relatively few copper projects at the moment and demand could exceed supply in the next few years. Nevada Copper is the first new US copper producer in a decade.
The Canadians, headquartered near the headquarters of Tesla and Google, are exploring for metals in the US state of Nevada at its Pumpkin Hollow copper project. Currently, copper mining has been ramped up significantly for weeks, and full production is expected to be reached before the end of this year. In addition to the current project, the new management shook out another promising ace from its sleeves. An open-pit project is located in the immediate vicinity of Pumpkin Hollow and has already been approved. The US copper producers are getting a tailwind from politics. The new President Joe Biden supports the production of raw materials in the US to minimize dependence on China in the long term. Due to the current bull market on the copper markets, Nevada Copper is a speculative tip with long-term potential.
Nikola - On a knife's edge
The new management of Nikola, the specialist for hydrogen trucks, is genuinely not to be envied. The Company is currently trying to regain lost trust in the capital markets. But the past keeps catching up with the former stock market star, which last year still had a higher market value than Ford Motors. Following General Motors' investment cancellation last year, another strategic partner now appears to be pulling out. The South Korean Hanwha Group wants to sell half of its shares in Nikola. Hanwha, which Nikola describes as a key partner and strategic investor, plans to sell 11.05 million shares, or 50% of its current stake in the Phoenix-based Company, according to a securities document filed Wednesday. However, according to a company statement, Hanwha is expected to remain a key strategic and active partner.
Currently, Nikola is driving a strategy to launch its first zero-emission, fuel cell-powered truck in 2023, complete the first phase of a factory under construction in Arizona by the end of the year and build the first of up to 700 hydrogen fueling stations starting next quarter. To this end, the US Company plans to tap the capital market and raise another USD 100 million. An investment in Nikola is a kind of roulette game at the moment. Chart-wise, the important mark of the December low at around EUR 12 could hold, and positive news could give the paper a disproportionate boost. The short ratio recently peaked at 35%. The Company is also among the top 10 most-discussed stocks on Reddit.
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