19. April 2021 | 08:10 CET
Plug Power, Desert Gold, Bayer - Shares with opportunities despite all-time highs?
Almost all indices are near their all-time highs. No wonder, given the expansive monetary policy and the associated inflation expectations. Commodity prices, in particular, are seeing a sharp rise. Thursday, gold was able to break the resistance area at USD 1,750. Despite this positive environment, however, some stocks are far from their all-time high. We will take a closer look at these today.
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ISIN: US72919P2020 , CA25039N4084 , DE000BAY0017
"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
Plug Power - Currently still in a downtrend
It was not that long ago that hydrogen was the trending market. All shares went through the roof. For the past three months, however, the sector has been in a state of gloom. Electromobility has regained the upper hand and so Plug Power's share price fell by over 54% in that time. Last week, the share price fell by 16%. However, if you want to look on the bright side, the stock is still up nearly 450% for the year.
Morgan Stanley last week put the rating on 'Hold' and adjusted the price target to USD 35. It is evident that Plug Power has been on a growth trajectory for years and meaningful strategic partnerships are being announced regularly. In early April, an alliance with Acciona SA, a large Spanish group, was announced. The goal is to capture 20-30% of the hydrogen market in Spain and Portugal by 2030. As a result, the company would have indirect access to funding from the EU, which plans to support the hydrogen market with subsidies totaling USD 550 billion by 2025.
Currently, the downward trend is intact. Only above USD 31.70 would the picture brighten significantly.
Desert Gold - Update on the SMSZ project
The Desert Gold share has been stuck in a sideways trend between EUR 0.09 and EUR 0.12 since January 11, 2021. That could soon change with the update on the SMSZ project from April 15, 2021, on its exploration wells. The drilling is progressing well, with 5,741 m of 20,000 m completed. 92% of auger drilling has been completed and up to 1,452ppb of gold has been discovered. Gold content was encountered beneath a thin laterite layer in some auger drilling. It is important to note that gold was also hidden under laterite layers in neighboring successful gold mines.
Results from auger drilling have identified 10 additional target areas, 3 of which are directly related to gold-bearing trend zones. In addition, geophysical data shows areas that are prime targets for gold mineralization.
With some results still pending, additional target areas may be added for auger drilling. In summary, the area in Mali encompasses high potential, not for nothing are some large gold mines in the immediate vicinity. With rising gold prices and further positive company news, one can assume rising prices. The high of Desert Gold from August 2020 was EUR 0.228.
Bayer - Difficulties still predominate
The Monsanto takeover continues to weigh on Bayer's stock to this day. In the last fiscal year alone, provisions and valuation allowances of over EUR 10 billion were made for the lawsuits. Since October 30, 2020, the downward trend has been stopped at around EUR 40.00, with the share price climbing again since then. Since March 11, Bayer stock has moved in a sideways range between EUR 52.01 and EUR 54.78. The 2020 high was above EUR 73.00. On Friday, the share closed at EUR 54.07. From a chart perspective, it has thus broken out of the previously formed wedge.
Sustained momentum may have been given to the stock by the FDA's announcement on April 15 that it has placed the drug Aliqopa for chronic lymphocytic leukemia on the orphan drug list. In the pharmaceutical field, Bayer has its own approach. They let other companies do research, and if Phase 2 trials are successful, they then take a stake in the companies. After a successful Phase 3 of drug development, the partner can tap into Bayer's existing distribution network.
Currently, however, the product is not expected to show initial results until 2022 at the earliest. We will probably see soon whether the upper side of the sideways trend at EUR 54.78 will be broken.