25. February 2021 | 11:28 CET
NIO, Silver Viper, BYD: E-car investors should think outside the box
Electromobility is turning industries upside down, much more than many think. It has long been known that electric cars rely on lithium and copper. It is also an open secret that Chinese manufacturers now have a competitive advantage in electromobility and that manufacturers such as BYD and NIO are rightly being hyped. However, in this article, we will look at why silver can be an alternative for investors with a weakness for e-car stocks. But first, let's look at an auto stock that has it all.
time to read: 2 minutes by Nico Popp
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
NIO: A range of 1,000 kilometers is something to talk about
NIO unveiled a new model a few weeks ago and was one of the investors' darlings for a while. But recently, the value weakened somewhat. In the last month alone, it fell by a whopping 20%. What does this mean for the share? If you look at the chart from an annual perspective, the correction no longer seems so dire. The upward trend is still intact. The first investors are already repurchasing the share at EUR 40. If the stock comes under pressure again, a healthy correction could also allow prices to fall below EUR 35, without this necessarily being a bad sign in the long term.
Most recently, a Deutsche Bank analyst also issued a buy recommendation for NIO. The Company is increasingly a competitor for Tesla and further increased its sales in the fourth quarter. The new premium sedan with the somewhat clumsy name ET7 indicates that NIO's cars could also find brisk sales in the future. The Chinese flagship is said to enable ranges of up to 1,000 kilometers - making even Elon Musk jealous. The NIO share shows that prices and fundamental developments do not always run in lockstep and that investors need to keep a cool head, especially in times of weakness. However, given the general conditions and the Company's situation, this should be easy for investors: Apart from the share price, everything is fine with NIO.
Silver Viper: The Instis love this small silver stock
The boom in electric mobility is currently spilling over into the commodity markets: Copper has known no stopping for months. Silver has also freed itself in recent months and, at times, even made gold look old. Silver has always been used in seat heaters, displays, infotainment systems and silver-coated contacts. Even more of the precious metal is needed in electric cars or hybrids because of silver's high conductivity. The Canadian Company Silver Viper operates in Mexico and is developing a gold-silver project there, La Virginia, which the Company wholly owns. Furthermore, there are options to acquire further claims. A few weeks ago, good drilling results pushed the share.
The property has already been explored in the past. Silver Viper can therefore rely on historical data, which makes exploration easier for the Company. Further drilling is planned for 2021. Silver Viper's management emphasizes being in the same boat with shareholders and holds 23%. In addition, some institutional investors hold another 60% in Silver Viper. The share has been running sideways for months and could prove to be an alternative to already ambitiously valued stocks from the e-car sector. Silver Viper is currently valued at only EUR 23.5 million and that may change on good upcoming drill results.
BYD: All-inclusive share rides roller coaster
One stock that is also causing a stir in the wake of the e-car hype is BYD. The Chinese manufacturer shines as a jack-of-all-trades: BYD not only builds electric cars but is also a well-known producer of batteries. The latter will soon be increasingly offered to other manufacturers and the battery division could then go public. Compared to NIO, the stock showed greater relative strength last month and lost about 15%. BYD also showed initial signs of stabilization yesterday. Bargain hunters can still hope for prices between EUR 20 and EUR 22. As with NIO, everything is still okay for BYD from a chart perspective. Although the valuations are high, the companies are also well positioned. Those who find the drop in NIO or BYD too great should not disregard silver - Silver Viper, in particular, currently appears to be in a solid starting position.