26. July 2021 | 09:48 CET
NEL, Pure Extraction, Volkswagen VZ: Where one piece of news can change everything
Sustainability is one of those things - The closer you look, the more complex the situation becomes. Just recently, a study by the non-governmental organization ICCT showed that even hydrogen vehicles fueled with green hydrogen could have sustainability flaws. The reason: the tanks are sometimes made of carbon fibers. Their production can generate about as many greenhouse gases as the production of batteries for e-cars. We look at three stocks related to hydrogen and mobility and explain what opportunities investors can associate with them.
time to read:
ISIN: NEL ASA NK-_20 | NO0010081235 , PURE EXTRACTION CORP. | CA74622J1012 , VOLKSWAGEN AG VZO O.N. | DE0007664039
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
NEL: More up or more down?
Although sustainability is complicated, studies such as those conducted by the non-governmental organization ICCT help raise awareness of existing weaknesses. Such understanding of problems is known to be the beginning of any positive change. Shareholders of the Norwegian hydrogen pioneer NEL would also like to see such a change. The share was the star of the past year, still trading above the EUR 3 mark at the beginning of 2021. Since then, however, the air has gone out. Every glimmer of hope, which was reflected in a slight rise in the chart, has since been directly sold off by the market. On a one-year horizon, the share price has now lost 5.6%.
The saying "Time in the market beats timing the market" is impressively disproved by the price performance of NEL. But what should investors do with the share now? NEL is a specialist in the production, storage and transport of hydrogen. These are good prerequisites. But the sales hardly justify even the current valuation. At present, it even looks as if the share will continue to fall. A positive signal would only come from a rise above the EUR 2 mark. The share is currently of little interest.
First Hydrogen: Hydrogen delivery vehicles as a glimmer of hope
The First Hydrogen share was also caught up in the negative pull surrounding hydrogen shares. The Company still trades on the stock exchange under "Pure Extraction", but a name change has already been decided. First Hydrogen is preparing to put a hydrogen-powered delivery truck on the road. Ballard Power and AVL have already been signed up as partners. The body of the hydrogen delivery van is to come from well-known manufacturers. Currently, a prototype is being developed to convince investors. Arguments favoring the hydrogen vehicle are the higher efficiency and the more extended range of 400 to 600 kilometers.
The project is undoubtedly a gamble, but new technologies have often been the first to gain acceptance in the commercial sector in the past. One example is Deutsche Post's electric vehicles. The Company is currently valued at around EUR 50 million. If the prototype succeeded in convincing potential investors and these investors immediately placed an order, the current level would be promising. Given the weak market environment for hydrogen stocks, investors should buy into First Hydrogen in small tranches and closely follow the Company news about the startup. The Company's idea is good, but investors are looking for safety, especially in a difficult market environment. The share is speculative - but that always offers opportunities as well as risks.
Volkswagen: What is next?
The Volkswagen share has a balanced risk-reward profile. The Company seems to have already achieved the mobility turnaround - at least all the models VW is currently promoting are electric. Volkswagen is also building up the supply chains around batteries for electric cars and making them sustainable. In this way, it can score points with discerning customers who want to know where the respective metals come from and, above all, how they are mined. Volkswagen's preferred shares gained a whopping 44.6% over the course of a year. Most recently, the value consolidated. The greatest electric fantasy currently seems to have faded.
With the recent, slightly negative sideways trend, the Volkswagen share shows that the fantasy around the mobility turnaround has disappeared. Even harder hit was the share of NEL, which cannot even counter the somewhat weaker sentiment with remarkable sales. The stock of First Hydrogen, which is still called Pure Extraction on the stock exchange, is also suffering from the market environment. Here, however, any positive news about potential cooperation partners or even customers can become a game-changer. Investors should keep the value in mind. But timing remains crucial.