December 10th, 2021 | 10:55 CET
Nordex, Troilus Gold, Gazprom: How investors cash in on climate-billions
Countries around the world are pumping billions into the expansion of renewable energies. At the same time, there is a lack of investment in fossil fuels, which are still urgently needed. We explain who is profiting from this reluctance to invest and whether, in the end, another commodity might not come out on top, using three shares as examples.
time to read: 3 minutes
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Author:
Nico Popp
ISIN:
NORDEX SE O.N. | DE000A0D6554 , TROILUS GOLD CORP. NEW | CA8968871068 , GAZPROM ADR SP./2 RL 5L 5 | US3682872078
Table of contents:
"[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals
Author
Nico Popp
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.
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Nordex: Who is turning the margin?
The plans of the new German government are ambitious: More space for wind turbines, only half the time for planning and approval, and huge power lines from north to south - underground, so that citizens' initiatives cannot take a blocking stance in the first place. Wind power operators, such as Nordex, welcome the plans. Recently, business in Germany has stalled a bit. Due to bureaucracy and limited space, domestic business has not been able to pick up the pace that would have been possible. That is why Nordex is looking for solutions abroad. In a research article on researchanalyst.com, the Company states it is looking for growth in Europe and South America. Most recently, the Company reported orders from Peru and Brazil.
Although the general conditions for Nordex sound quite positive and customers are in a buying mood, there are also downsides. The margin in 2021 is only 1.0%. That is too low and means that not much of all the new orders will stick - at least if the margin does not change quickly. To become more profitable, Nordex switched its wind turbines to the new Delta 4000 platform, and already in 2020, the new platform accounted for around 81% of orders. Since the margin is still low in 2021, it will take a further increase in profitability to turn the tide. The stock has been dynamic recently - the new orders, in particular, have been convincing. But Nordex must work on its margin. Only then can the billions invested in regenerative energy make Nordex's cash register ring.
Troilus Gold: 8.1 million ounces of gold and counting
Whenever politicians and central banks flood the markets with billions, concerns about market distortions and inflation increase, gold has always been considered a safe haven in such cases. The Canadian Company Troilus Gold has a gigantic gold-copper property in the Canadian district of Quebec. Despite a resource of 8.1 million ounces of gold, the Troilus team keeps drilling. "It is important for investors to know that Troilus is most likely more than just a deposit of gold. Troilus has the potential to be an entire gold belt. All of our work to date points to that, and each drill hole makes the picture we have of the Troilus project even clearer," said Justin Reid, president and CEO of Troilus, in an interview several months ago.
The Company recently announced a feasibility study in 2022 that will provide further insight into the economics. With the infrastructure already in place on and around the property, which CEO Reid says is worth the equivalent of about CAD 350 million, Troilus Gold should be well-positioned. The share could pick up steam once gold gets back into favorable waters. Currently, the share is trading at its low for the year at EUR 0.50. In June, the share had reached the EUR 0.90 mark.
Gazprom: Sanctions looming soon?
While politicians are pushing ahead with climate change, which is undoubtedly an urgent humanitarian project, the classic oil industry is somewhat out of focus. But oil and gas are still essential pillars in the energy mix, shown, for example, by the state of the German real estate portfolio: Here, oil and gas heating systems are still the standard. While Shell and BP are increasingly building wind farms, the competition is profiting from Gazprom. Whether to the west or the east, the Company is busy supplying gas worldwide and earning handsomely from it. One risk, however, could be Putin's recent muscle-flexing on the border with Ukraine. Russia is always good for negotiating sanctions.
While Gazprom offers a good deal but is also risky for the reasons mentioned, Nordex is not yet putting its horsepower on the road. First, the margin has to increase sustainably - no easy task in times of disrupted supply chains and expensive raw materials. Troilus Gold is better positioned. Canada is a legally secure location for commodity companies, and gold is not subject to geopolitical conflict. Although the Company is in the early stages, it has a lot to offer to make this phase successful.
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