May 16th, 2022 | 12:48 CEST
Future Tech check: BASF, Meta Materials, BYD, Rock Tech Lithium
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
BASF: What grandfather knew...
Even in our grandfathers' day, BASF was a stock that could be added to a portfolio at almost any price with a very long-term investment horizon. But if you look at the share price over the past ten years, you see a loss of 15%. Over a five-year period, the Ludwigshafen-based Company is down around 45%. The fairy tale of the evergreen for investors has thus been definitively disproved. At present, share prices are being weighed down primarily by concerns about the future energy supply for the gigantic Ludwigshafen plant, which is heavily dependent on Russian gas. The share price was also weaker relative to the market as a whole.
The extent of the uncertainty surrounding BASF is also shown by a recently published industry study by Baader Bank, which expects costs of between EUR 2.6 and 7.9 billion in the event of a German embargo on Russian oil and gas. The wide range alone shows that BASF shares are likely to remain volatile in the coming weeks - and that daredevils could seize opportunities at low prices. The courageous should take note of the level at EUR 47, but below that, it could become uncomfortable. The worst-case could usher in a sell-off that dwarfs anything ever seen before.
Meta Materials: Listen to the CEO of unimagined possibilities!
The business model of Meta Materials, a company listed on the Nasdaq, also has the makings of a revolution. Here, the name says it all: so-called metamaterials are synthetic substances with physical properties that do not occur in nature. Back in 2016, researchers at the Karlsruhe Institute of Technology (KIT) created a material that, thanks to struts only 200 nanometers thick, allows for extraordinary lightness while at the same time having a strength similar to diamonds. But metamaterials are more than just strong and light. They can also refract light in such a way that objects coated with them disappear to the human eye - in other words, the light is deflected around the object. Other applications include window panes with integrated antennas or head-up displays. The list of applications is very long, and in principle, many things are conceivable.
Up to now, Meta Materials has always struggled with the price. The Company now wants to change that and believes that, thanks to mass production, it will soon be able to reach regions where the innovative material is profitable. Due to the material's versatility, the first breakthrough could be followed by a whole avalanche of further innovations. So far, Meta Materials' figures paint a picture of typical growth. In parallel, the Company is collecting patent after patent. Within the last week, the share price even went up against the generally weak trend. On Thursday, May 19, Meta Materials CEO George Palikaras will present at the free online International Investment Forum (IIF). Starting at 12:40 pm (CET), the presentation will include a Q&A session. Palikaras may not only provide insights into his Company but may also say a few words about the general mood on the tech mecca Nasdaq. Register and join in free of charge via Zoom - it may be worth your while.
BYD: Breakout scenario, but there is a catch...
That future investments are everything but yesterday's news was recently demonstrated by the share price of Chinese e-car pioneer BYD. In addition to its battery production, the Company also has a chip subsidiary and has already indicated that it wants to make its platform available to other car manufacturers. The strategy is clear: higher unit numbers ensure lower unit costs. At the same time, since China has secured critical raw materials for decades, BYD is well-positioned at first glance. The chart also looks increasingly dynamic. However, investors should not forget ESG risks. While BYD is a highly broad-based carmaker, efforts are underway, not only within the EU, to make supply chains around raw and basic materials for batteries and other future products transparent, with a particular focus on sustainability. While companies such as the German-Canadian Company Rock Tech Lithium present new developments in transparency and recycling almost weekly, companies from China, in particular, remain surprisingly tight-lipped when it comes to the keyword "ESG".
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When it comes to promising future investments, investors have to keep an eye on valuations in times of crisis. Anyone who buys expensively now is very likely to be punished. At the same time, however, the current market environment also offers many promising themes at significantly reduced prices. Here, investors should thoroughly evaluate the market potential and question sustainability levels. Meta Materials seems to be well-positioned to benefit from future developments in the long term. Rock Tech Lithium is also doing its homework. For those in doubt, next Thursday is an excellent opportunity to ask questions to the CEO of Meta Materials as well as to representatives of other companies.
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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
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