CAUTION with Siemens Energy! BUY CTS Eventim? OPPORTUNITY with Strategic Resources!

Strategic Resources: Something Big is Taking Shape Here

The turning point has been heralded not only in Germany but also in Canada. And there, it is being actively implemented. The country is investing billions in domestic defence production. It is well known that this vast country possesses critical raw materials. But in the future, the goal is also to expand the downstream value chains within the country. As an investor, Strategic Resources is an interesting option to benefit from this. With a market capitalization of just CAD 16 million, it remains a hidden gem, but that could change soon.

Strategic Resources' flagship project is BlackRock. It contains iron, vanadium, and titanium and would be the first mine of its kind in North America. In addition, the company plans to build a facility for the production of iron ore pellets at the deep-water port of Port Saguenay. This is arguably one of the most exciting projects in the North American iron ore sector and aligns perfectly with the government's strategy. With this facility, Strategic Resources would be excellently positioned to benefit from the transformation of the global steel industry. This is because a key competitive advantage of the company lies in its focus on low-carbon iron ore pellets. These are intended to help European steel manufacturers in particular meet the increasing requirements of the European Carbon Border Adjustment Mechanism.

And it is not just the iron ore that the company plans to process itself. There is already a strategy and a partner in place for the processing of vanadium as well. Together with battery developer Tyfast Energy, the company is developing a domestic supply chain for vanadium-based battery materials. The battery-grade vanadium oxide from the BlackRock mine is to be processed by Tyfast into lithium-vanadium oxide anodes for high-performance batteries.

In a recent interview with Lyndsay Malchuk of the IIF, CEO Sean Cleary explained that the company intends to significantly expand its already approved pelletizing plant in Port Saguenay, in the Canadian province of Québec. The goal is to increase production capacity from 1.5 million tons to 4 million tons of iron ore pellets per year.

https://youtu.be/ha8A2-FPIwk?si=a2oFSk-vcijGTP1m

A milestone has recently been reached in the permitting process for the planned expansion. The company has responded to all questions from the Québec Ministry of the Environment regarding the proposed amendment to the existing operating permit. Comprehensive approval has already been granted for the BlackRock project, including the mine, processing plant, and metallurgy site in Port Saguenay. This means construction of the pelletizing plant could begin as early as next year. As mentioned at the outset, the valuation does not appear high against this backdrop.

Siemens Energy: Caution in the US

Unlike Strategic Resources, a great deal of growth potential is already priced into Siemens Energy. With a market capitalization of approximately EUR 137 billion, the company faces high expectations regarding revenue growth and earnings development in the years ahead. As a result, execution will remain critical, as the current valuation leaves limited room for disappointment. And Siemens Energy shareholders must at least keep an eye on developments in the US and on competitor GE Vernova.

This is because the growth stories of GE Vernova and Siemens Energy are largely based on the booming expansion of AI data centers. However, local resistance to new data center projects is growing. Even Vernova CEO Scott Strazik recently warned that some projects are progressing more slowly than expected due to local protests, regulatory hurdles, and permitting issues. Although management currently sees no threat to the existing order backlog, delays could still affect the pace of new order intake.

Particularly critical is the fact that opposition to data centers is intensifying in various regions of the US. Residents and environmental groups criticize, among other things, the high electricity and water consumption as well as the strain on local infrastructure. For now, this primarily poses a risk to the timing of the investment wave rather than a slump in demand. Nevertheless, investors should closely monitor developments, as a prolonged delay in data center expansion could slow the growth pace of GE Vernova and Siemens Energy. And this is certainly not priced into the share prices.

CTS Eventim: Analysts Positively Surprised

Even after the release of the quarterly report, CTS Eventim's stock has yet to gain real momentum. Yesterday, the stock of Europe's largest concert promoter traded at EUR 56, roughly 22% below its level at the start of the year. To reach its all-time high of EUR 112, set in May 2025, the stock would need to double.

In any case, the quarterly report did not provide the hoped-for boost for the stock, even though the figures are certainly impressive. In the first three months of the year, consolidated revenue rose by 23% year-over-year to EUR 613.5 million. Adjusted EBITDA increased by 18.5% to EUR 118.9 million. In the ticketing segment, revenue increased by 2.5% to EUR 219 million. Comparability was impacted by changes in the collaboration with Stage Entertainment. Adjusted for this effect, the ticketing business recorded growth of more than 6%. The long-term extension of the partnership with Stage Entertainment was already announced in April.

The Live Entertainment segment showed particularly dynamic growth. Revenue here rose by 38.3% to EUR 403.6 million. Adjusted EBITDA climbed by as much as 151.1% to EUR 29.1 million. Growth was driven by successful tours and events in several markets, including high-demand events in Germany and tours in the US. Additional momentum came from the venue business, particularly from hosting the ice hockey tournaments for the Winter Olympics and Paralympics at the Unipol Dome in Milan. Following the first quarter, the Executive Board views the Group and both business segments as being in line with expectations for the full year.

Most recently, Deutsche Bank Research confirmed its "Buy" recommendation for CTS stock. Analysts were positively surprised by the company's performance in the first quarter. They estimate the fair value of CTS shares at EUR 96.

Strategic Resources shares currently appear undervalued. This hidden gem is benefiting from the Canadian government's efforts to strengthen the economy. One would hope for such a consistent approach from the German government as well. Siemens Energy remains a core investment in the energy sector. However, nothing can go wrong with its growth. CTS Eventim continues to hold an outstanding market position. However, it currently lacks momentum.