04. June 2021 | 10:19 CET
Nordex, Deutsche Rohstoff AG, Nikola - Enormous scope for further growth
The replacement of fossil fuels by renewable energies is a done deal. The targets for a climate-neutral world are being raised by politicians almost every week. Nevertheless, according to experts, the world will not get by without oil and gas as the primary source of energy in the future. Oil prices continue to climb, trading at around 30% above pre-Corona levels. At the same time, the economic recovery is only just getting underway. Due to global demand, this trend is likely to continue for some time, with significant upside potential for producers.
time to read: 4 minutes by Stefan Feulner
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Deutsche Rohstoff AG - Fully on track
From a fundamental perspective and in terms of share price performance, Deutsche Rohstoff AG can feel like an absolute winner. With a share price increase of almost 90%, it is among the top 3 shares in the "Scale," the segment of the German Stock Exchange for SME companies. A clever move by the management around CEO Dr. Thomas Gutschlag during the low point of the Corona pandemic made this possible.
In the second quarter of last year, the latter bought a land package at rock-bottom prices in Wyoming, among other places, during the oil crash, which briefly sent the price hurtling down to USD 12. The pumps are now running at full speed again, and the purchased packages act as a warrant on the results of the Mannheim-based Company. In the first quarter alone, Deutsche Rohstoff AG produced 37% of the oil volume forecast for 2021 for USD 65 per barrel. The figures for the first quarter were accordingly impressive. EBITDA of EUR 21.29 million was significantly higher than revenue of EUR 17.92 million.
It was possible to achieve this effect because, in addition to new oil fields, the Company built up an investment portfolio of gold and oil shares and bonds during the crisis, which has already been wholly liquidated at a profit. As a result, the total cash, short-term receivables and securities held as fixed and current assets rose to EUR 70.8 million. The bulging cash position is now to be used for further acquisition targets. Strategic investments in critical metals around electromobility, such as copper or lithium, have moved up in the investment focus of Deutsche Rohstoff AG.
Another treasure, which should be lifted in the coming months, is already in the portfolio. The Company owns 12.8% of Almonty Industries, a mineral explorer that will build the world's largest tungsten mine in South Korea. Financial closing for the project is expected in June. For the next 15 years, a buyer with a guaranteed price floor has already been found in the Austrian Plansee Group. The share price yesterday was EUR 15.95, close to its pre-Corona level. A break of the resistance at EUR 16 would offer short-term potential up to EUR 20.
Nikola - The disruptor on the upswing
The starting signal for a rally was given at the end of last week. The crisis-ridden Company, which went public last year via SPAC, received a buy recommendation from the US analyst firm BTIG with a price target of USD 18. Analyst Gregory Lewis sees a future "disruptor of the truck market" in the specialist in the production of battery and fuel cell trucks. Although BTIG expects relatively few deliveries of the Tre battery-electric truck model this year, mass production should start no later than 2022. By fiscal 2024, experts expect sales of electric and hydrogen fuel cell-powered heavy-duty trucks to reach USD 1.4 billion.
Since GameStop and AMC Entertainment, the recommendation caused an uproar in the Reddit community "r/wallstreetbets" and pushed Nikola into the ranking of the most discussed stocks. The goal of the Redditians is to fight institutional short sellers and ignite a short squeeze. The EV truck specialist has had its share of confrontations with short sellers in the past. Last September, Hindenburg Research accused Nikola of fraud by publishing a report due to several irregularities in the Company, which led to an investigation by regulators. Since then, the stock has lost more than half of its market value and is still one of the most shorted stocks on Wall Street, with a ratio of 34.35%.
Thus, the best conditions for the community to squeeze the short sellers out of their positions. The efforts of "r/wallstreetbets" are fueled by the current chart situation. Thus, at USD 15.54, the downward trend formed since November 2020 could be broken with high volume. Currently, the price is already quoted around the BTIG coverage at USD 18. The 200-day line is at USD 21.05. If this is broken, the annual high at USD 30.40 is already considered the next price target. Nikola is only for speculative investors. However, should the restructuring of the new management take effect, significantly higher quotations are possible due to the reasons described above.
Nordex - Trouble looms
Since the rather sobering quarterly figures, the price of Nordex stock has only known the downward direction. Even positive reports such as a buy recommendation by Nord LB with a target price of EUR 30 fizzled out. The analyst particularly emphasized the order trend, which is likely to continue to be positive due to the expansion of wind power.
Yesterday's announcement of a further order from Spain for 76.8 megawatts also sent the stock down during the course of the day to EUR 17.44, a drop of 1.5%. Nordex SE is supplying 16 N155/4.8 turbines for the expansion phase of a wind farm in central Spain. The order also includes service and maintenance of the turbines for two years. The order volume was not disclosed. The last chart technical support is now in the area of EUR 17.10. Should this support be torn, prices in the area of EUR 15 are not unlikely.