April 21st, 2022 | 11:35 CEST
Plug Power, Barsele Minerals, Nordex - Prepared for the crisis
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
Nordex - Decline in order intake
The figures for the first quarter can safely be regarded as disappointing. Last year it was already clear that the Hamburg-based wind turbine manufacturer was struggling with weak margins. However, the fact that there was even a decline in order intake compared to the same period last year is more than a negative surprise. After all, the conditions are better than ever. The climate and Ukraine crises have prompted politicians to call for an accelerated expansion of renewable energies - in Nordex's case, wind energy. The Easter package from Robert Habeck, Federal Minister for the Economy and Climate Protection reinforced this even more emphatically.
The Hamburg-based company received orders worth 1.17 GW in the first quarter, compared with 1.25 GW in the first quarter of 2021. The only positive aspect is that the share of high-margin Delta4000 turbines had increased from 73% to 91%. This is badly needed to boost margins that have been weak in recent years due to legacy contracts. "The order intake in the first quarter was again driven by turbines of the successful Delta4000 series with more than 90%. In particular, the N163/5.X, which is ideally suited to the requirements of the various global markets, has made a decisive contribution to this development and signals the great confidence of our customers," CEO José Luis Blanco stated on the Company's website.
After a weak start to trading and a drop of more than 2%, the Nordex share recovered the losses in the course of the day. Nevertheless, an investment at the moment is subject to greater risks.
Barsele Minerals - Insider tip from Scandinavia
Historically, gold has been regarded as the ultimate protection against inflation, and the precious metal has always acted as a crisis currency in the event of geopolitical risks. The same was true this time when the Russian army invaded Ukraine. Gold was able to approach its all-time high of USD 2,074 up to USD 4, and then a sell-off took place for the first time. A decline is quite possible again in the short term, but this should be used as a long-term entry into gold mining stocks. Due to the high debt issue and the high inflation risks, gold should not be missing in any portfolio as an admixture. Experts advise a share of up to 10%.
Barsele Minerals also has a decisive advantage, as it focuses on the politically and economically sound mining region of Sweden. The Barsele project is located in the mining region of Västerbottens Län in northern Sweden, 600km north of Stockholm and covers 34,500 hectares in the Fennoscandian Shield. The Belcarra Group-led company, with a 45% ownership interest, is a junior partner in the joint venture to develop the Barsele Gold Project. Senior partner Agnico Eagle, with a 55% interest, is conducting and financing exploration on the property. In recent years, Agnico Eagle, as the operator, has advanced exploration and drilled approximately 155,000m. A total of 404 drill holes have been completed. In 2019, Barsele released a resource estimate of 2.41 million ounces of gold. The next target is to achieve a resource estimate of 3.5 million ounces through a further 30,000m drill program. The Canadians' planned acquisition of Agnico Eagle's stake fell through in recent months, but the issue is likely to be reignited in the coming months.
The market capitalization of Barsele Minerals is around EUR 40 million. The Royal Bank of Canada already valued the project at USD 375 million in a 2016 survey - at a gold price of USD 1,350. Now the troy ounce stands at USD 1,950.
Plug Power - Cooperation is a gamechanger
Plug Power has signed a contract with Walmart to supply 20 tons of green hydrogen for up to 9,500 forklifts at Walmart's distribution and fulfillment centers. "Walmart has been a pioneer in innovative hydrogen and fuel cell technology for over a decade. Our hydrogen-powered solutions provide a productivity enhancement tool for Walmart's operations," said Andy Marsh, CEO of Plug Power.
Walmart is one of the major customers of fuel cell manufacturer Plug Power, along with Home Depot and Amazon, and has set a goal of becoming carbon neutral by 2040. "Hydrogen is critical to building a more sustainable supply chain, and Plug Power's hydrogen solutions enable us to make further progress," said Jeff Smith, senior director of supply chain maintenance services. "Sourcing green hydrogen can help Walmart move closer to our goal of being emission-free by 2040."
News of the expansion of the collaboration was well received by investors. As a result, Plug Power's share price moved up nearly 10% to USD 28.05. Despite the success news, Plug Power remains an extremely ambitiously valued company.
High inflation coupled with uncertainties due to the Ukraine crisis are weighing on the economy and the capital market. As a portfolio addition, investors should consider investing in gold mining stocks. Barsele Minerals appears attractive given the high-grade property. Nordex disappoints, and Plug Power is still ambitiously valued.
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