October 15th, 2021 | 13:23 CEST
Nordex, Tembo Gold, Plug Power - Great rebound potential
"If you don't have the shares when they fall, you don't have them when they rise", this quote comes from the stock market legend André Kostolany. The words of the old master can be applied to the current state of both the stock and precious metals markets. The renewable energy sector currently offers great comeback opportunities. The prices of most wind, hydroelectric and hydrogen stocks have lost more than half their value in recent months, and the bottoming process is underway. Which companies are coming back and continuing their upward trend?
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
NORDEX SE O.N. | DE000A0D6554 , TEMBO GOLD CORP. | CA87974N4057 , PLUG POWER INC. DL-_01 | US72919P2020
Table of contents:
"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Tembo Gold - Seven years off
An extraordinary story is being written by Canadian exploration Company Tembo Gold, which operates the eponymous gold project in Tanzania. The Tembo property is located in the Lake Victoria goldfield in Tanzania, next to some of the largest high-grade gold deposits in the world, Barrick Gold's Bulyanhulu mine and AngloGold Ashanti's Geita gold mine. So far, so good.
The problem in the past was a government that opposed mining, so much so that in recent years this led to a virtual flight of investment and the collapse of the mining industry in Tanzania. Tembo Gold was forced to stop exploration work for an incredible 7 long years.
However, the newly elected head of state recognized the enormous potential of the East African country. Since then, new investment in the sector has increased by 725%, and mining is making a comeback second to none.
Tembo Gold's management took advantage of the downtime to expand the property from 110 sq km to 174 sq km. In addition, 54 new drill targets were identified using artificial intelligence technology. As a result, 57 targets are now available for future exploration. As of this month, the 7,000m drilling program is underway. For financing, the debt-free company was able to raise CAD 2.3 million on the capital market. The share price has already jumped to CAD 0.20 in the wake of the project's revival, but there is still a considerable distance to go from the high of CAD 6.87.
Plug Power - A bouquet of good news
"The money you make on the stock market is pain money. First comes the pain, then the money", another of Kostolany's quotes. Should this quote apply to the shareholders of the Plug Power share, they can sit back and relax. After all, they have had their fair share of pain in recent months—first, errors in the balance sheet, which forced management to correct the financial statements, then the general correction on the markets. The all-time high of USD 75 from January is more than 60% away.
But there is hope. After stabilizing in the 25% range in recent weeks, a breakout above resistance at USD 35 could generate a buy signal and complete the bottoming phase. The current price jump was driven by several positive news.
A cooperation with Airbus has been announced to research the feasibility of supplying aircraft and airports with green hydrogen. The Franco-German Company, newly admitted to the DAX 40, Airbus sees green hydrogen as a promising option for decarbonizing air traffic and wants to bring emission-free aircraft into the air by 2035.
A partnership was also announced with Phillips 66, which has 13 of its own refineries and joint venture refineries in the USA and Europe. The two US companies intend to collaborate on developing low-carbon hydrogen business opportunities. "Phillips 66 will help us achieve our goal of producing 1,000 tons of green hydrogen per day while deploying cost-effective renewable fuel solutions," says David Bow, executive vice president of Electrolyzers Solutions at Plug Power.
Last but not least, an upgrade from US bank Morgan Stanley fluttered into the fuel cell developer's door. The analysts upgraded Plug Power's stock from "equal weight" to "overweight." The price target was increased from USD 35 to USD 40.
Nordex - The order king
It is certainly not due to the bulging order books at wind turbine manufacturer Nordex that the share price is only moving south; instead, it is a margin problem at the Hamburg-based company. In both the third quarter of 2021 and the first nine months, Nordex significantly increased its order intake compared to the previous year. From June to September 2021, Nordex received orders for 389 wind turbines (Q3 2020: 271) with a capacity of 1,829 MW (Q3 2020: 1,229 MW).
From January to September, the Nordex Group received orders for 4,610 MW (9M/2020: 3,759 MW), which includes a high portion of around 80% of the Delta4000 series. The share has recovered by more than 19% since the low of EUR 13. However, the next broad resistance is already waiting at EUR 15.
The markets are gearing up for the year-end rally. Tembo Gold has potential in the precious metals sector due to the start of drilling programs; Plug Power and Nordex shares may have also bottomed out.
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