January 2nd, 2020 | 05:45 CET
NEL ASA, Saturn Oil & Gas, VARTA - which stock will be the top performer in 2020?
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Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Hydrogen from Norway
In 2019, the NEL ASA shares were one of the most frequently discussed hydrogen investment opportunities. The Norwegian company develops plants for the production and distribution of hydrogen. In the age of radical change in mobility, hydrogen is one of the cleanest energy sources of the present. The construction of a hydrogen infrastructure is less complex to set up and would require less behavioural changes by the users than would be the case with battery-powered vehicles.
There are about 14,000 filling stations in Germany, and it would be sufficient to fill them up with hydrogen, because the filling process is similar to that of conventional gasoline or diesel. This is a clear advantage compared to the installation of several million charging points. However, the widespread introduction of hydrogen must also be politically desired.
Oil from Canada
Saturn Oil & Gas from Canada is an oil producer that was created three years ago as part of a takeover by a new management team. The company has since developed into a profitable success story. At the current price level of over USD 60.00, the production of WTI grade oil is highly interesting. Saturn Oil & Gas is one of the highest-margin producers in North America, as the company's production costs of approximately USD 12.00 are relatively low.
The higher the oil price rises, the more money is left for the management to drive growth. However, the issue of oil production was completely neglected on the stock market last year, even though the industry can produce attractive key figures. Despite profitable sales growth of over 350% in the first nine months of 2019, the Saturn Oil & Gas share was traded at around 50% below the level of the previous year. Reason enough for GBC Research to believe that the share has more than 100% upside potential in 2020 and announced a buy recommendation. Ultimately, crude oil demand is not expected to decline in the coming decades, but rather to continue to rise.
Batteries from Germany
VARTA, a German company with a long tradition, is now listed in the MDAX as a manufacturer of microbatteries due to its market positioning. The demand for high-quality microbatteries for hearing aids and headphones is high. The company is able to gain market share, especially in the premium segment, as the energy density of VARTA's batteries is expected to be approximately 30% higher than that of Asian suppliers. The advantage for users is that the service life is much longer and they need to be charged less frequently.
It is speculated that Apple is also among VARTA's customers, and the giant from Cupertino now has a 60% market share in wireless headphones. However, the market for hearing aids is also growing increasingly, so that the demand for high-quality microbatteries from this segment is also unchecked. The demand for VARTA shares was also boosted by the entry into the field of electric mobility. The company belongs to an industrial consortium and is planning to set up a European battery production facility, which also represents a risk if hydrogen as an energy source in mobility becomes politically accepted.
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