September 1st, 2022 | 14:05 CEST
New trending stock in the wings? Plug Power, Cardiol Therapeutics, BioNTech
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"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Plug Power and Hydrogen Shares: The deeper the fall, the better the comeback
From EUR 12 to around EUR 30 within a few weeks? For shareholders of Plug Power, that has come true. The energy crisis has shown that alternative energy sources are urgently needed. Thanks to hydrogen, energy from renewable sources can be stored and used later. In addition, a large part of the infrastructure can remain in place in this way. For example, many utilities in Germany use gas-fired combined heat and power plants. These can be converted to hydrogen and thus become green. Existing vehicle fleets can also be converted thanks to innovative hydrogen technology - the shares of companies in this sector, such as dynaCERT and Clean Logistics, have recently risen sharply. Within one month by around 160% and 59% respectively.
As a result, the two hydrogen stocks outperform Plug Power, which has "only" risen by around 38% in the same period. But what is the source of such short-term opportunities on the stock market? And where could the next rocket ignite? All the shares mentioned have hydrogen as a common theme - alternative energy sources are booming in the current situation. In addition, all three stocks were relatively unpopular just months ago. Especially with dynaCERT, investors had already lost all hope. The business model of Clean Logistics, the truck retrofitter from northern Germany, was also considered too daring by many investors at first glance. After all, there is competition in Germany from Daimler Trucks, among others. Yet the relative unpopularity and unfamiliarity of the latter two stocks a few months ago has only made their comeback more dramatic. When starting from a low level, stocks can continue to rise. Those who choose a stock early will benefit disproportionately once the mass of investors have rediscovered a value.
Cardiol Therapeutics: Clinical trials of heart drug in a decisive phase
One stock that has the potential to make a comeback is the biotech company Cardiol Therapeutics. The Company is currently in the midst of a Phase II clinical trial of its compound CardiolRx for acute myocarditis, or heart muscle inflammation. A few weeks ago, the Company announced that the first patient had been enrolled in the trial. Cardiol Therapeutics uses its cannabidiol-based compound to combat inflammatory processes that cause damage to the tissues of the heart. A 2016 study by WS Lee and others published in the journal of Molecular Medicine shows that this approach is scientifically sound. It is probably one of the reasons why Cardiol Therapeutics was able to attract the attention of many investors in the past. The share climbed to a peak of EUR 4.20 in Germany, successfully made the leap to the (bio-)tech mecca Nasdaq and collected a mid-double-digit million amount as part of a capital increase.
But what secures the Company's progress in the long term disappointed above all short-term thinking shareholders - many investors gave up in exasperation in the past ten months. The performance of the Cardiol Therapeutics share is correspondingly "bombed out". Now that the Company has successfully concluded its Annual General Meeting in the summer and the clinical studies around CardiolRx are progressing, the coming weeks and months should also provide news flow again. Biotech stocks are known for high volatility. Examples from the past show that biotech companies quickly become the focus of pharmaceutical companies after their move to the Nasdaq, as soon as it becomes apparent that an active ingredient can become a blockbuster. Years ago, for example, the shares of GW Pharma rose tenfold within a very short time. Cardiol Therapeutics has been hovering just above EUR 1 for the past few months but has recently built up strength. Speculative investors should keep this stock in mind. On September 27, Cardiol CEO David Elsley will also present online at the International Investment Forum (IIF). Participation is free of charge.
Fully financed and oversold - therefore better than BioNTech?
Cardiol Therapeutics, which is still relatively unknown, is also suitable for investors who want to cover the Corona pandemic with their investment. Clinical trials are also taking place around the active ingredient CardiolRx to treat the consequences of Corona disease, which often affect the cardiovascular system. While Corona shares, like BioNTech, have consolidated in recent months but are still comparatively high in the markets' favor, the Nasdaq-listed Canadian biotech company has fallen out of focus with regard to Corona.
In order to be able to take advantage of comeback opportunities on the market, investors should first focus on shares that currently attract little attention and are "out". Then, in addition to a good business model, all that is needed are potential catalysts for the share price. In the case of hydrogen stocks, the energy crisis is providing a tailwind. In the case of biotech stocks, it is typically positive study results or new areas of application for active ingredients. Disease outbreaks can also be grist to the mill for healthcare stocks. In the case of Cardiol Therapeutics, some conditions have already been met: The share is comparatively "out", and the product has potential. In addition, the Company has sufficient capital in its coffers and, with its Nasdaq listing, should already be in the focus of the industry. The ongoing clinical studies around CardiolRx, as well as the development of the pandemic, will ultimately have to show where the share is headed.
Conflict of interest
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