10. September 2021 | 10:14 CET
Daimler, Aztec Minerals, Varta: How growth investments succeed
New technologies are currently transforming the economy. The triumphant advance of electric cars is a done deal, and even buildings will soon be largely climate-neutral. First and foremost, carmakers, manufacturers of photovoltaic systems and energy storage systems are driving this development. But other beneficiaries are currently receiving little attention from the market. We present three stocks.
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ISIN: DAIMLER AG NA O.N. | DE0007100000 , AZTEC MINERALS CORP. | CA0548271000 , VARTA AG O.N. | DE000A0TGJ55
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Daimler makes US Americans and Asians happy
One of the biggest beneficiaries of the mobility revolution is likely to be Daimler. The Company has made good progress in electrifying its fleet. In addition, Daimler keeps coming up with technical innovations. Such as when the new S-Class can drive largely autonomously thanks to assistance systems or when large electric ranges are announced for new models. In China and the US, the current premium models are also still in high demand and gave the Company an excellent start to the current year. But there are problems: The semiconductor shortage is also hitting Daimler. Many automakers have already had to cut production because no new parts are coming in. The entire automotive industry must find solutions here.
In some cases, automakers have already signed supply contracts directly with chip manufacturers, leaving traditional suppliers out in the cold. Other automakers, such as the Chinese BYD, even have their own chip division. Similar solutions are not yet in sight for Daimler, but according to the Company, there are already talks along the supply chain to counter the chip shortage. However, investors should not expect the situation to ease this year. The share has been dipping for three months and recently also tore a support zone downward. Prices between EUR 65 and 67 are likely in the short term. The share is currently not very interesting.
Aztec Minerals: Clear strategy, good drill results
A company that has a promising outlook for several critical commodities is Aztec Minerals. The Canadian Company is working on gold-copper deposits in Mexico and on a silver property in Arizona that promises lead, zinc and gold at the same time. Both projects are being advanced in joint ventures, but Aztec Minerals is the majority owner in each case. The Company sees itself as a trailblazer for the mining industry. Many large companies would no longer attach a significant role to exploration and instead focus on acquisitions. With its work, Aztec Minerals wants to develop promising projects and sell them at a premium to the big ones in the industry.
Numerous acquisitions in the mining industry during the past years have shown that this approach can be promising. Currently, Aztec Minerals is valued at only EUR 11.8 million. At the same time, the Company continues to develop its projects. Recent reports from the Tombstone project in Arizona include 1.8 g/t gold and 36.9 g/t silver over a distance of 70.1 meters. Since small exploration companies are usually not yet the first investment targets of investors at the beginning of an upward movement of commodities, opportunities for favorable entries may exist. Aztec Minerals offers a broad commodity mix on two early-stage projects. The stock is speculative but, allocated wisely, can play an exciting role in a balanced portfolio.
Varta: What is in it for the new business?
Many German private investors have also added Varta to their portfolios in recent months. The German top dog in the field of batteries and button cells had announced its intention to enter the business with batteries for electric cars. Since then, Varta has been one of the darlings for speculative investors. But the share has not gained momentum since then: within a month, the price fell by 18.8%. Analysts at Metzler bank also recently lowered their thumbs and called out a low price target of EUR 106. Investors would be better advised to wait and see. It is not yet clear to what extent Varta will be able to profit from the battery boom and what it will cost to push the new business.
Whenever established companies look for new business areas, there is great hope on the one hand, but on the other hand, there are also risks that things will not go so well after all. Varta shareholders are currently feeling this. Every technology turnaround is associated with risks - the delivery problems of chips for the automotive industry speaks volumes. The situation is different in the raw materials sector. Here, rising prices have spurred numerous new projects, but a boom in which drilling equipment and personnel are in short supply is still a long way off. Investors can take advantage of this early stage with Aztec Minerals.