22. March 2021 | 08:00 CET
BYD, Blackrock Silver, First Majestic Silver: The greener the world, the better for silver
It was unclear for a long time when the automotive industry would focus on electromobility. For too long, German manufacturers, in particular, continued to bring large, heavy and powerful combustion engines to the market. But now Volkswagen and Daimler and Co. have rethought and are fully committed to electromobility. The consequences are manifold: In addition to rising share prices, such as VW, the prices of potential suppliers are also climbing. This much is clear: The mobility revolution requires one thing above all: more raw materials.
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ISIN: CNE100000296 , CA32076V1031 , CA09261Q1072
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BYD: This share has only one catch
Even manufacturers like the Chinese electric pioneer BYD are feeling the rising demand for raw materials. The Company began many years ago as a battery producer and gradually put forward ideas for small vehicles and buses.
Now BYD covers the entire range of electric cars. BYD continues to have its battery production and thus offers many solutions from a single source. In the long term, it is even planned to float the battery production separately on the stock market and also increasingly supply battery cells to other manufacturers. The positive side effect for BYD: unit costs are falling. BYD has developed a technology that makes it possible to install powerful batteries in cars to use space in the best possible way. Anyone in the fast lane in terms of technology naturally receives inquiries from potential passengers: BYD recently reported the delivery of 5 double-decker buses to Great Britain.
Although the order is not huge, it underlines that BYD has long been one of the first contact points when municipalities or companies want to order electric vehicles. The stock has been correcting since January, but that's no surprise after the fast-paced year 2020. BYD is well positioned internationally and benefits from numerous raw materials in the Middle Kingdom. In the medium term, however, Western customers, in particular, are likely to attach importance to the entire supply chain for electric cars being sustainable. And this is probably where the Chinese have the only serious shortcoming.
Blackrock Silver: New name, proven quality
While the discussion about raw materials for electromobility primarily revolves around lithium or even copper, many investors forget about silver's properties as an industrial metal. Silver has always been in all cars, but electric vehicles contain even more of the precious metal. Even solar cells often cannot do without silver. The Company Blackrock Silver is searching for high-grade deposits of silver and gold in the US state of Nevada. The Company is focusing on its flagship Tonopah West project, which has attracted attention in the past with promising discoveries of gold and silver.
In 2021, Blackrock Silver plans to drill an additional 40,000 meters and advance the project. Since the Company's primary focus is now on silver, it changed its name and now carries "Silver" instead of "Gold" as a name suffix.
In addition to Tonopah West, the Company has another project on offer, Silver Cloud, where the Company has most recently drilled. Here, further results are still pending. Depending on how promising the project is, Blackrock Silver could also imagine spinning it off into a separate company. Instead of treating Silver Cloud stepmotherly as a side project, this approach could leverage value for shareholders, Blackrock believes. Blackrock Silver's stock has been trading sideways for months, holding steady above 50 cents in Germany. During the last precious metal rush, the value traded beyond EUR 1. Those who want to reflect the silver fantasy in their portfolio and can also live well with the by-product gold should think about the share.
First Majestic Silver is almost boring
First Majestic Silver's stock performance shows just how much value can be added when a company brings new silver-related projects to market or develops them further. The Company managed a return of 194% over a one-year period. The Company recently renewed its share buyback program and plans to repurchase approximately 4.5% of its issued and outstanding shares. This measure alone is capable of driving the share price further. But how much further can the value rise?
First Majestic Silver operates 3 silver mines in Mexico and generates about 70% of its revenues from the precious metal. Gold accounts for the rest. Other smaller projects are in the development stage. However, with a market capitalization of around EUR 3.2 billion, the stock is already a mid-sized producer. Investors who want to invest in shares with leverage in the wake of the electric car fantasy, the solar boom and the generally increased interest in precious metals, are better off looking at Blackrock Silver with its promising Nevada project.