July 20th, 2023 | 07:00 CEST
Plug Power and ThyssenKrupp with hydrogen momentum! Profit with Globex Mining
Hydrogen and electromobility are gaining momentum once again. First, there was the successful IPO of ThyssenKrupp Nucera, followed by record sales at Nel ASA and record profits at BYD. Plug Power and Globex Mining should also benefit from the positive sentiment. Plug Power has jumped and gained over 10% in the last few days. Analysts see further upside potential. The same is true for Globex Mining, which, as a mining incubator in North America, was allowed to profit from the next commodity boom. Analysts see 100% upside potential for ThyssenKrupp shares.
time to read: 3 minutes
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Author:
Fabian Lorenz
ISIN:
THYSSENKRUPP AG O.N. | DE0007500001 , PLUG POWER INC. DL-_01 | US72919P2020 , GLOBEX MINING ENTPRS INC. | CA3799005093
Table of contents:
"[...] 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
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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Globex Mining: Diversified, profitable, debt-free and high cash position
With Globex Mining, investors can add a broad commodity portfolio to their portfolio and thus benefit from the next commodity boom in a risk-reduced manner. The mining incubator from Canada has bought up over 200 exploration projects or closed mines in recent years. The projects range from gold and silver to lithium and rare earths. Globex does not develop and operate these projects itself but makes them available to other companies in return for cash payments, stock options and subsequent royalties. This reduces the Company's own risk and, at the same time, generates a steadily increasing cash flow. In the first quarter of 2023, net income was CAD 543,800 - and the trend continues to rise. The largest holdings include Electric Royalties (11.916 million shares), Pan American Silver (103,870 shares) and Agnico Eagle (24,440 shares).
Globex shares gained about 15% in July to CAD 0.83. And the valuation remains anything but high. The market capitalization of about CAD 45 million is offset by cash of about CAD 25 million. Moreover, the Company is debt-free and cash-generative. There is also a regular news flow due to the numerous investments. Most recently, Cerrado Gold announced that the UK Export Credit Agency is interested in participating in the financing of the Mont Sorcier Iron Vanadium Project in Canada with up to CAD 420 million. Globex Mining will receive a 1% gross metal royalty from Cerrado Gold on all iron production from the project. Through its interest in Electric Royalties, it also benefits from the 1% gross metal royalty on all vanadium production between Electric Royalties and Cerrado.
If the momentum in commodities holds and the newsflow at Globex remains positive, the annual high at CAD 0.91 is the next target. After that, the all-time high from October 2022 at CAD 1.64 could be attacked.
Plug Power: More than 50% price potential?
The Plug Power share has also jumped in recent weeks. From its low for the year in May at USD 7.48, the stock has now gained more than 70% and is trading at USD 13.20. In addition to the sector momentum, Plug Power also benefited from a company announcement. It recently received an order to supply proton exchange membrane (PEM) electrolysers with a capacity of over 100 MW. The plant is to supply an oil refinery in Europe with green hydrogen from 100% renewable energy sources. Construction and commissioning is scheduled to take place as early as 2024. The production of about 43 tons of green hydrogen per day is expected to avoid about 516 tons of CO2 (carbon dioxide) per day.
Plug CEO Andy Marsh said, "By using our industry-leading PEM technology, Plug is playing a leading role in advancing green hydrogen projects in Europe. We are demonstrating how green hydrogen can be produced at scale to decarbonize hard-to-degrade industries while helping companies meet aggressive carbon reduction targets." The PEM stacks for the system will be manufactured at Plug's 155,000-square-foot Gigafactory in Rochester, New York. The Gigafactory currently has a capacity of 100 MW per month for electrolyser stacks.
Northland Securities analysts are excited about the order and upgraded Plug's stock following the news. Instead of "Market Perform," they now rate the hydrogen pureplay "Outperform." The price target was raised significantly from USD 13 to USD 22.
ThyssenKrupp: 100% possible?
Can ThyssenKrupp's stock double? At least, that is what the analysts at Baader Bank believe. They recommend buying the stock with a target price of EUR 16. The share is currently trading at around EUR 7.30. The justification for the optimism, however, appears somewhat thin. After all, they expect weak quarterly figures. Only statements on the mood in the industry should improve. Following the successful IPO of its subsidiary Nucera, ThyssenKrupp should confirm its full-year free cash flow forecast. ThyssenKrupp is expected to publish its quarterly figures on August 10.
Deutsche Bank takes a less positive view of ThyssenKrupp's performance in the further course of the year. Although the experts expect the quarterly figures to be better than the previous quarter, the EBIT expectations for 2023 and the two subsequent years have been reduced. Therefore, the Thyssen share is only a hold position for the analysts of Deutsche Bank, with a price target of EUR 8.50.
Meanwhile, Plug Power has again put a proud USD 8 billion on the stock exchange scales. Following Nel's massive increase in revenue, although accompanied by an increase in losses, expectations for Plug Power are likely to be high again. In comparison, Globex seems to have a much more exciting risk-reward profile: It is diversified, profitable, debt-free and has a high cash balance. The performance of ThyssenKrupp still seems to be strongly linked to the performance of Nucera. In that case, why not invest directly in the subsidiary?
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