22. October 2020 | 11:15 CET
JinkoSolar, Saturn Oil & Gas, Plug Power - Here comes the second chance!
The markets are correcting on a broad front. Hydrogen and fuel cell stocks, which have been booming for months, are taking a breath of fresh air. In a long-term trend, this is good and quite the norm. It is time to take a look at the fundamental aspects once again, in addition to the chart support zones and trend formations. Some companies have managed to position themselves broadly and can continue to grow solidly in the future. Others have only swum with the current and will go down in time. Now it is time to put the pearls into the account.
time to read:
ISIN: CA80412L1076 , US47759T1007 , US72919P2020
"[...] The Oxbow Asset now delivers a substantial free cash flow stream to internally fund our impactful drilling and workover programs. [...]" John Jeffrey, CEO, Saturn Oil + Gas Inc.
Photovoltaics more in demand than ever
According to a forecast by the International Energy Agency (IEA), photovoltaics will become the world's largest generator of electricity in the coming years. According to this, the solar industry is expected to grow by 13% every year until 2030. In turn, this means that in 2030 the installed capacity of photovoltaic systems will cover one-third of the world's electricity demand.
This assumption is quite realistic. On the one hand, states are finally promoting more investments in solar energy, and on the other hand, photovoltaics is now cheaper than generating power from coal or gas. The International Energy Agency even goes so far as to say that solar energy will outstrip hydropower. The increasing drought caused by climate change and cheaper technology are the main reasons for this, it says.
World market leader still exciting
However, the world market leader of solar module manufacturers had to record heavy losses yesterday. From the all-time high of around USD 90 after the start of the trading day, the stock closed down about 12%. However, we must remember that four weeks ago, JinkoSolar was still trading at just under USD 20, but has now quadrupled this figure.
There is no denying that the share still has some potential for correction, with an upward trend of around USD 70. However, in terms of its fundamental valuation compared to its peer group, JinkoSolar is anything but expensive.
Megaproject in Europe
Fundamentally, things are going like clockwork at the Chinese Company founded in 2006 and based in Shanghai. Jinkosolar announced a joint venture with Juwi earlier this week. JinkoSolar is supplying 204 megawatts of bifacial modules for a Juwi project in Greece. Juwi's Greek subsidiary will use the modules to complete the Kozani solar park in northern Greece. The project is Juwi's largest photovoltaic project to date and, according to JinkoSolar, will also be one of the largest solar parks with bifacial modules in Europe once completed.
Plug Power - Caution
Further in correction mode are the papers of hydrogen and fuel cell companies. The very well-positioned US manufacturer, Plug Power, is now entering the broad and essential support zone around USD 14. Here one should watch the price behaviour very closely. However, the long-term upward trend is still intact.
In search of favourable entry opportunities
Countercyclical investing is part of the business strategy of John Jeffrey, the experienced CEO, and Chairman of Saturn Oil & Gas. He has been looking for further acquisitions since the collapse of the oil market in March 2020. The CEO believes that the acquisition of assets from competitors offers significant advantages over the Company's drilling program. It will be interesting to see whether Saturn Oil & Gas can demonstrate the first successes in the coming weeks.
Organically on the trail
In everyday business, things were promising until the Corona situation. In the 2019 production year, Saturn Oil & Gas was by far the cheapest oil producer in Canada. At around USD 12 per barrel of oil, production costs were significantly lower than those of the big, well-known oil players, which all had production costs of well over USD 30 per barrel. The Company's largest properties are in West Central Saskatchewan. The oil fields offer good access to the underground deposits of Viking Light Oil.