Close menu




August 4th, 2021 | 10:11 CEST

Defense Metals, BYD, Nordex - Buy the trend!

  • RareEarths
Photo credits: pixabay.com

Whether a laptop, cell phone, electric motor or wind turbine - rare earths are an indispensable raw material for producing all these goods. The megatrends of electromobility and renewable energies, in particular, are fuelling demand. Motors for electric vehicles and generators for wind power plants require powerful permanent magnets, and this is where rare earths such as neodymium and dysprosium come into play. We show you how to profit from this trend.

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: DEFENSE METALS CORP. | CA2446331035 , BYD CO. LTD H YC 1 | CNE100000296 , NORDEX SE O.N. | DE000A0D6554

Table of contents:


    DEFENSE METALS CORP - Profiting from rising prices

    Rare earths also play a significant role away from civilian applications. The defense industry is a major consumer of critical raw materials. An American submarine requires around four tons of rare earths, a destroyer around two tons and a fighter jet over 400 kilograms. These are huge quantities. In general, China has a dominant market position in rare earths with significant potential supply and value chain risks. That is why international efforts are being made to rapidly ramp up rare earth production outside China. However, this endeavor will take several more years.

    Here, among others, the exploration Company Defense Metals comes into play. The Canadians are developing the Wicheeda Rare Earth Project, which covers about 1,700 hectares in British Columbia. The Company is still at a relatively early stage. Past drilling programs have delivered good results. Indicated mineral resources amount to 4.89 million tonnes at an average grade of 3.02% light rare earth elements (LREO) and suspected mineral resources of 12.1 million tonnes at an average grade of 2.90% LREO.

    The Company secured CAD 5 million in a capital increase. With these funds, a new drill program will commence in the summer to build on the success of the 2019 campaign. The current 2021 drill program is expected to cover 2,000 to 5,000 meters. The goal is to expand the zone of rare earth enrichment to the north of the property. In addition, targets in the center and northwest of the property are on the action plan.

    Investors can profit from an emerging rise in rare earth prices with Defense Metals' stock. The Company has a high-opportunity project with good infrastructure. China's dominant market position and the increasing demand for rare earths from many industries, including the defense industry, underlines the focus of Defense Metals and how vital the mining of critical raw materials outside the People's Republic is.

    The shares have corrected significantly from this year's performance high of around CAD 0.70 to CAD 0.23. Thus, the explorer is currently valued at a moderate CAD 18 million. The shares are also interesting from a timing point of view at the moment. In a few weeks, the first results of the new drilling program should be available. If the Canadians succeed in continuing the previously delivered good results or even discover new mineralization zones, this will positively impact the share price.

    BYD CO LTD - Goldman Sachs is bullish

    Recently, Chinese stocks have been properly shaken up in the wake of the Chinese government's regulatory frenzy. But in the past few days, they have been able to regain ground. The BYD share has gained around 40% within a few days and could now attack the high marked at the beginning of the year. The fundamental data provides a tailwind here. The automaker was able to increase sales in the first half of the year. Goldman Sachs then reiterated its buy recommendation of USD 40 for the electric car and battery producer. The investment case of star investor Warren Buffett's Chinese flagship holding is fully intact. New highs, as forecast by Goldman Sachs, are only a matter of time.

    NORDEX SE - Balance sheet strengthened going forward

    Recently, the North German wind turbine manufacturer carried out a capital increase with a volume of EUR 586 million. In the process, just under EUR 340 million was raised in cash and, an investment in-kind of just under EUR 197 million was made. With a subscription ratio of 11:4, the capital increase was placed at a price of EUR 13.70. The major shareholders went along with the capital measure. The Group is increasing its financial flexibility for further growth and improving its balance sheet ratios. In addition, net debt and consequently the interest burden are falling. Most analysts rate the share as a "buy" but lower their price targets due to the dilution effect. Since March, the share has dropped significantly from EUR 28 to EUR 16. Currently, the market capitalization is around EUR 2.5 billion. On August 12, the Group will publish its half-year results.


    Numerous industries are dependent on rare earths. Price increases due to a substantial increase in demand and/or a supply shortage caused by China are serious risks. Investors can benefit from the trend of higher rare earth prices in the long term by investing in rare earth producers or explorers. Defense Metals is a promising company in this regard.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by Stefan Feulner on June 22nd, 2022 | 11:22 CEST

    New opportunities in the supercycle - Glencore, Defense Metals, NIO

    • Electromobility
    • RareEarths

    Concerns about a further sharp rise in inflation sent the stock markets into a tailspin in recent weeks. The main reason for the enormous inflation was exploding energy and commodity prices. In addition to crude oil and natural gas, metals important for industry, such as copper and rare earth metals, are currently correcting. This should again offer an opportunity to participate in the supercycles in the long term.

    Read

    Commented by André Will-Laudien on June 7th, 2022 | 13:23 CEST

    Rheinmetall, Thyssen, Defense Metals, Airbus: Fighting the war with these blockbuster shares

    • Defense
    • armaments
    • RareEarths

    The German government has reaffirmed the need for a powerful army and anchored the 100 billion euro special fund in the constitution before the Whitsun recess. The reason why the Basic Law had to be used for this was supposedly due to the budget issue because the red and green members of the government, in particular, do not want the general budget to be diminished by defense spending. Now it is here again, the reversal of the "peace dividend"; for many years, Germany in particular was able to profit from the reduction in defense spending. NATO welcomes the German decisions and now sees Germany as a paying "full partner" again. This also finally puts to rest Trump's demand for Berlin to contribute more to NATO peacekeeping costs. Where are the opportunities for investors now?

    Read

    Commented by Nico Popp on May 23rd, 2022 | 10:36 CEST

    Long on war with Rheinmetall, Defense Metals, BYD

    • RareEarths
    • Defense

    Armaments are booming! As early as 2021, global military spending reached USD 2.113 trillion, according to the Stockholm-based peace research institute SIPRI. That was followed by Russia's invasion of Ukraine and the West's surprisingly united response. Currently, numerous weapons are arriving in Ukraine from many countries around the world. A high-ranking Russian military observer recently even said on TV that almost the whole world was against Russia. At the same time, Sweden and Finland are striving to join NATO. Additional billions for the armament sector are inevitable. We present three stocks that are booming.

    Read