04. November 2020 | 13:44 CET
General Electric, SolGold, Nikola - Take a close look!
New times have dawned. In the USA, after the current stock market correction, people are celebrating a small upswing as if it were the latest landing on the moon. Yes, there were useful GDP data, after 6 months of negative figures October joined the ranks with a growth of +33.1% - but the levelled annual level is still a good 27% below the previous year. The next lockdown is imminent, which will inevitably come after the election given the new infection figures of 92,000 a day. The now noticeable recovery reflects the hard reset of the economy after the sharp declines since March. The stock market is betting that the economy will regain size in a few quarters. However, one should bear in mind the dowry: Exploding unemployment and the unprecedented national debt has been rampant for 12 years and is now being legitimized by the fight against the pandemic!
time to read: 3 minutes by André Will-Laudien
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.
GENERAL ELECTRIC - the giant has turned
At General Electric, strong third quarter results and a much better than expected fourth quarter guidance have shown that CEO Larry Culp is successfully turning the Company around. Culp described the transformation of the old GE and its transformation to a digitized conglomerate to shareholders. Today, the process chains are linked together instead of fighting over the benefits within a confusing group.
Larry Culp has declared war on encrustations and is restructuring pedantically, area by area. He has already achieved about 75% of his target of more than USD 2 billion in cost reductions, coupled with a cash flow increase of another USD 3 billion in 2020. At the same time, the previously oppressive debt has been reduced by USD 11.7 billion to date. Fortunately, demand for most of the conglomerate's products is recovering significantly, and the presidential office recently provided the necessary image boost in the fight against the pandemic.
Earnings per share for the third quarter were 6 cents compared to the analysts' average estimate of -3 cents. Two more quarters like this and the share price is above the USD 10 mark. With his lean management techniques and spending cuts, Larry Culp has turned the Company around for the better, now there is still enough left to build up reserves for pension obligations, and GE is back. Once one of the most valuable Companies in the world, GE now has a capitalization of only USD 66 billion and is no longer represented in the major Dow Jones Industrial. But the chart smells like a clear saucer formation. If an old giant does not rise again...
SOLGOLD - copper and gold well mixed
SolGold plc is a leading exploration Company focused on the discovery of world-class copper-gold deposits. SolGold has a highly prospective first-mover advantage in Ecuador, but an under-explored section of the Andean Copper Belt which hosts several Tier 1 copper and gold projects. SolGold is on-site and has the right team to bring the ores to the surface. The regional exploration program of the first round is already fully funded through the end of 2021.
The Porvenir Project is located in southern Ecuador, approximately 100 km north of the Peruvian border. It is located in the easternmost metallogenic part of the Ecuadorian sector of the Andean Copper Belt, which hosts several of the world's largest and most significant copper and gold deposits in Colombia, Ecuador, Peru, Argentina and Chile. Drilling commenced on September 15, 2020, in the Cacharposa District within the Porvenir Project area and continues to produce excellent results. As the visual survey was equally good, the presence of an extensive, strongly mineralized porphyry copper-gold system is expected, and an additional 50,000 metres are being drilled to test this.
The Company has a market capitalization of CAD 1.04 billion and is quoted at CAD 0.54. The stock has tripled smoothly since the March low. With further good drilling results, the journey continues, because copper is on everyone's lips. The uncertainty in the outcome of the US election has already caused the gold price to jump above USD 1,900 - the chart breakout lurks at USD 2,035.
NIKOLA - Everyone looks at the little Tesla
The Nikola Corp. is a US startup that sees itself in an "early stage of development" and has to defend itself against detailed and far-reaching fraud allegations of a well-known short seller. Now an important date is approaching for the stock market players because the lock-up period - i.e. the blocking date for the sale of existing shareholders - expired last week, and the sale of further shares would put additional pressure on the already strained share price.
In mid-September, the share price suffered a 65% drop when, during a failed analyst conference, admissions had to be made that the share price was still at a very manageable level. Founder and Chairman Trevor Milton, has had to give up his position. The hydrogen technology Company sometimes generates hardly any significant turnover, but for the operational side, they have now poached a manager in Detroit. His name is Bruce Smith, and he has more than 30 years of manufacturing leadership experience and has managed several companies.
Nikola Corp. was created from a reverse merger with a SPAC to facilitate the Company's IPO. The current valuation is still very high at EUR 6.1 billion, which means that future developments must also bring significant progress; otherwise, there is a risk of a total sell-out. The Q3 figures will be released on November 9th - excitement for the announcement!