November 15th, 2022 | 12:21 CET
COP27 shares sought: BASF, Infinity Stone, Varta, VW - Billions for the energy turnaround!
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
10 billion euros for Spain - VW goes full throttle in e-mobility
The VW Group's new, low-cost e-models will likely come mainly from Spain in the future. VW has announced a small electric car for under EUR 25,000 for the middle of this decade. It is now to be produced in Spain in three years by the subsidiary SEAT. The Wolfsburg-based carmaker and its Spanish offshoot have already reached an agreement with the government in Madrid on government funding for the project. Volkswagen and SEAT will receive EUR 397 million for the project from the first round of the PERTE funding program. Volkswagen is shouldering the major part of the total investment, which is expected to be around EUR 10 billion. A good 60 companies associated with Volkswagen are participating in the major projects led by SEAT.
A gigafactory for the production of battery cells is also planned on the outskirts of Valencia; with 3,000 new jobs, battery cells with a total capacity of up to 40 GWh will be produced annually from 2026. Volkswagen has delivered half a million ID models worldwide since October 2020, with 10 new electric cars planned by 2026. Volkswagen is phasing out internal combustion vehicles entirely by 2033. A great move for VW, but unfortunately, a decision against Germany as a location. Domestically produced energy is now too expensive, so new attractive jobs are being created mainly abroad. The shareholders of the VW Group are not bothered by this. They have their eye on their profits, which are rising to a forecasted EUR 18 billion by 2025. Volkswagen shares can still be purchased on the stock market with a P/E ratio of 4.5 and a dividend yield of over 6%.
BASF - The market leader in battery materials invests heavily in China
When it comes to batteries for e-mobility, BASF is the global market leader in cathode materials. Cathode materials are central to the performance, affordability, reliability and sustainability of modern batteries for electric vehicles. BASF has an extensive toolbox of different methods that have a decisive influence on material properties. In this way, charging time and range are optimized - the decisive points for the acceptance of e-mobility.
Because BASF operates one of Germany's most energy-intensive industries, the chemical industry, investments are also being made abroad. The Ludwigshafen-based company plans to invest a total of EUR 10 billion in its new, third-largest site in southern China by 2030 - and they are sticking to it, despite the current global political situation. Another setback for Germany. The political decision against fossil fuels means a migration for BASF because the high calorific value and the unique properties of gas cannot be replicated with electricity alone. BASF shares have turned around just below EUR 40 and recently climbed above the EUR 50 mark. The spectre of a gas emergency seems to have vanished for the time being.
Infinity Stone Ventures - Critical metals for the energy transition
For Infinity Stone Ventures (GEMS), the energy transition and the increasing number of electric vehicles in the next few years is an opportunity to develop into an internationally known commodity. The Canadian company searches for critical metals in the provinces of Quebec and Ontario. It focuses on the Rockstone graphite deposit and the Taiga, Hellcat and Camaro lithium projects on an area of 3,850 hectares. Very close to Camaro is the well-known Corvette lithium trend discovered by Patriot Battery Metals in 2017.
The current Rockstone assay cycle is seeing the first success reports, as the fall drill program should be completed by November 18. Within drill hole RS-22-01, a 3-meter graphite lens was intersected within a 25-meter pyrite-rich interval. Its morphology appears to be strongly ordered hexagonal graphite crystallites and crystallite agglomerates, likely formed by hydrothermal activity at formation temperatures exceeding 700°C. The interesting property is located 45 km west of the seaport in Thunder Bay, and work is continuing and should provide further informative results no later than 2023.
Going forward, Infinity Stone aims to be a diversified supplier of critical energy metals with broad applications in the coming energy revolution. For battery and wind turbine manufacturers, nuclear energy and hydrogen technologies, Infinity aims to develop further deposits as the market is expected to register an exceptionally high growth rate (CAGR) of 15.8% from 2022 to 2027, according to a study by Mordor Intelligence. The key here is to get in early and move forward quickly. Infinity Stone shares have recently suffered somewhat from the market correction and can now be purchased at a low CAD 0.23. That means the well-positioned company is valued at only EUR 15 million.
Varta - The moment of truth
After three profit warnings in a row, Varta will deliver its final figures today, Tuesday. The stock made a fantastic comeback last week, gaining over 12%. This could be a harbinger of a slightly improved outlook after recent doubts about future growth. In a pre-release in October, the Ellwangen-based company already admitted a decline in sales from EUR 225 to 194 million. Overall, this would still be bearable if only the margin had not already ended up in the red due to the crushing cost burden. A revival in the share price would require a big, positive surprise and the management's conviction that the V4Drive battery solution can provide a blockbuster for e-mobility in the future. The low of EUR 26.50 has been set for the time being, and investors are now looking north with hope. It would be nice if the German technology company could get back on its feet after a price loss of over 70%.
The energy transition and climate protection are again in focus at the COP27 conference. Governments worldwide are fighting for more sustainability and an end to the overexploitation of nature for future generations. Implementing good GreenTech solutions requires innovations and the availability of important metals. Therefore, investors should combine good standard stocks with a touch of promising commodity stocks like Infinity Stone Ventures.
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