05. May 2021 | 09:14 CET
Infineon, Triumph Gold, Ballard Power - Invest in the future now!
The earnings season is in full swing. In addition to Corona winners such as TeamViewer or Zalando, which continue to profit from the consequences of the pandemic, biotech companies working to combat the virus also shine with solid figures. On the other hand, companies directly involved in the energy turnaround are disappointing at first glance. In addition to electric carmakers currently struggling with production stoppages due to the acute global chip shortage, renewable energy stocks have also missed analysts' forecasts.
time to read:
ISIN: DE0006231004 , CA8968121043 , CA0585861085
Triumph Gold - Best conditions
The conditions for a rising gold price could not be better. Rising inflation due to the ever-inflating money supply and historical debt levels provide a healthy long-term breeding ground for the precious yellow metal. Moreover, gold miners are in better fundamental shape than ever after a record 2020 and are sitting on mountains of cash to invest in new projects. Interesting second-tier mine operators with substantial assets abound due to the wave of consolidation that has been underway since August.
One diamond in the rough is the exploration Company Triumph Gold. The Canadians, in which heavyweight Newmont already has a 12.8% stake, operate the Freegold Mountain project in the Dawson Range gold belt of Yukon. The project covers an extensive area of the Big Creek fault zone, a structure directly associated with epithermal gold and silver mineralization and gold-bearing porphyry copper mineralization.
Recently, Triumph Gold additionally secured the Big Creek property, which is believed to host gold and copper. The property consists of 258 contiguous quartz mining claims in Yukon's Whitehorse Mining District. Drilling programs are expected to begin here in the spring. With about CAD 5 million in cash, Triumph Gold is funded for the entire year. Currently, the stock is forming a floor around CAD 0.16. With an expected friendly gold market, the Canadians should benefit disproportionately.
Ballard Power - Worse than feared
Yesterday, the Canadian manufacturer of fuel cells, Ballard Power, was brought back to earth. The Company, based in Burnaby near Vancouver, British Columbia, completely collapsed compared to the same period last year and missed analysts' already less euphoric estimates for both sales and losses. Revenue of USD 17.6 million was a crisp 26% below the first quarter of 2020, while analyst firms on average were expecting revenue around USD 25 million. Loss per share was also below forecasts at USD 0.06. The gross margin came in at 15%.
Despite the weak results, management is well prepared for the future. The reason is the bulging war chest of USD 1.3 billion. Ballard Power CEO Randy MacEwen plans to attack this during the year and accelerate investments in technology, products, advanced manufacturing and localization. The Canadians are seeing growing interest, particularly in fuel cell buses in Europe. As a result, follow-up orders were captured from Wrightbus and Solaris. In the truck market, joint development work was advanced with the Weichai-Ballard joint venture in China and with MAHLE on a fuel cell engine for the European market.
Also announced earlier this week was a strategic collaboration with Linamar focused on powertrains and components for the Class 1 and Class 2 vehicle markets in North America and Europe. Overall, the Company sees 2021 as a transition year with high investments to be prepared for strong long-term growth.
Infineon - Better than expected
Chip manufacturer Infineon, on the other hand, raised its forecast. The semiconductor market, which has exploded, and the continuing recovery in the automotive industry, keep the profits of the Neubiberg-based Company flowing. Management expects sales of around EUR 11.0 billion for the full year 2021. Capital expenditure is expected to remain at EUR 1.6 billion for the full year. The operating margin has also been raised from 17.5% to 18%.
The reason for the optimism lies in the excess demand in almost all segments. Electronics for accelerating the energy transition and for work and home life, for example, remain in high demand. Despite the positive news, the price of Infineon shares went south by more than 4%, trading at EUR 32.20. The outlook for the current third fiscal quarter was solid for market participants, but it no longer came as a surprise and was therefore already priced into the share price.
In the 32 area, there is a striking support zone that has been formed since the beginning of the year. Should this zone be sustainably broken, the next target would be a run to the EUR 28 range.