Close menu




October 20th, 2022 | 10:27 CEST

Plug Power, Desert Gold, BYD - Discover the opportunities

  • Mining
  • Gold
  • Electromobility
Photo credits: pixabay.com

"If you do not have the stocks when they fall, you do not have them when they rise." These wise words from a famous quote from stock market legend André Kostolany are little consolation to investors whose portfolios have melted considerably in recent months. In the long term, however, there are many attractive opportunities to enter strongly corrected companies at the current level. In addition to the stock market, other asset classes such as cryptocurrencies and precious metals also offer opportunities for disproportionate price gains in the future, despite the current uncertain environment.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: PLUG POWER INC. DL-_01 | US72919P2020 , DESERT GOLD VENTURES | CA25039N4084 , BYD CO. LTD H YC 1 | CNE100000296

Table of contents:


    Plug Power - Sales warning ahead

    In February, a report had been skeptical about the ambitious visions of leading US fuel cell manufacturer Plug Power. According to CEO Andy Marsh, who is known for his marketing skills, sales should reach USD 900 to 925 million in 2022. The big breakthrough is then planned for 2025. Here, the sales target is USD 3 billion, a gross margin of 30% and an operating profit of at least 17%.

    At least for the current year, the Company has had to row back once again, and the 2025 vision is also becoming somewhat distant. Company sales are now expected to be 5 to 10% lower than initially forecast by the Company's management. "The impact on revenue reflects some larger projects that may not be completed until 2023 rather than 2022 due to timing and supply chain issues. While sales in 2022 may be lower than previously anticipated, demand for fuel cell applications and electrolyzers remains robust," according to the Company's release.

    Investors acknowledged the "revenue shift" with a sharp sell-off to below USD 18, which broke the upward trend formed since May. Accordingly, the next striking support is at the high from 2020 at USD 14.35.

    Desert Gold - In the shadow of the gold correction

    The strong US dollar and concerns about further major interest rate steps by central banks worldwide continue to depress the gold price. Fighting inflation at all costs is the strategy of the monetary guardians. Despite recession worries on the financial markets, the players are determined to curb inflation with a tight interest rate. The fact that inflation has already gotten out of hand and can hardly be contained by further interest rate hikes without driving the economy into ruin should not only be apparent to economists. The voices are already increasing that an end to the strict monetary policy is already being heralded, which should give a sustained boost to the shares of gold producers and exploration companies.

    The advantage of smaller mining explorers is that they act as leverage in longer-term trend movements in the underlying price, both in one direction and the other. Despite excellent corporate performance in recent months, Desert Gold's stock is feeling the pinch. Since the July 2020 high, the stock has lost nearly 80% of its value and is trading at EUR 0.07 with a market capitalization of CAD 10.51 million.

    With the SMSZ project in Mali, Desert Gold owns one of the largest non-producing land areas in West Africa, with 440 sq km. Several producing mines are located in the neighborhood, including those of Barrick Gold, Allied Gold, Endeavour Mining, and B2Gold. The SMSZ property hosts Measured and Indicated Mineral Resources totaling nearly 1.1 million ounces. A total of more than 23 gold zones have been discovered in the area to date, which will be developed and analyzed for economic grades. With the release of results on the recovery rate of gold from crushed rock, Desert Gold was able to report strong results.

    This included recoveries of between 86% and 88% of the gold from the freshly drilled rock in samples from the Mogoyafara South projection area. These are excellent results and very important for economic viability if the ore body is later mined. Previous metallurgical tests at the Baranie East project have recovered gold in ratios of 83% to 98.7% depending on the rock strata, between 93.6% to 95.2% at Gourbasse West and 87.6% at Gourbassi East on freshly crushed gold ores.

    The next steps are to commence a 35,000m drill program, which includes 10,000m of potential drilling aimed solely at resource delineation. Overall, Desert Gold intends to follow up and expand known gold zones, with plans to focus on Mogoyafara South and Gourbassi West North initially. Desert Gold believes these are the largest gold systems discovered on the SMSZ property to date.

    BYD - Strong numbers and position reduction

    Major institutional players are partially selling their silverware and continue to shed position in the Chinese market leader in the electric car sector, BYD. After investor legend Warren Buffett decided weeks ago to sell part of his position, the world's largest investment company BlackRock lowered its share quota. A total of 3.92 million BYD H shares with an equivalent value of HKD 187.24 million were sold. As a result, the shareholding ratio fell from 6.21% to 5.85%.

    Almost simultaneously, the Shenzhen-based company reported outstanding preliminary results for the third quarter of fiscal year 2022. The "Build Your Dream" company was able to nearly quadruple its net profit compared to the same period last year. Thus, management expects net income to be between USD 765 million and USD 820 million, an increase of about 350%. According to preliminary results, earnings per share will be between USD 0.26 and USD 0.28. In the previous year, the figure was USD 0.06.

    The US investment bank JPMorgan continues to see the electric car company on the right track. For the analysts, BYD continues to be a top pick in the sector, and they repeated their price target of USD 35.03 after the publication of the preliminary figures.


    The sharp market correction in recent months has created anticyclical entry opportunities for many companies, which could deliver high returns in the long term. JPMorgan continues to see BYD as a top pick. In the case of Plug Power, the sales warning is likely to have an impact still. In the event of a sustained rise in the gold price, the exploration company Desert Gold could significantly outperform the base price.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    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.

    About the author



    Related comments:

    Commented by Juliane Zielonka on December 1st, 2022 | 13:09 CET

    First Hydrogen, Tesla, Volkswagen - Hydrogen or battery drive, who makes the race?

    • Hydrogen
    • Electromobility
    • GreenTech

    The German Federal Ministry of Research and Education has big plans: the natural gas network is to be converted as a supply structure for hydrogen so that Germany is well equipped for the future. The Canadian company First Hydrogen is betting on hydrogen propulsion, launching its first production facility in Quebec. A call for leadership is being heard regarding Elon Musk and his car company Tesla. It seems that a blue bird and the desire for freedom of expression are taking up so much of his time that the share price is wobbling. The competition is not sleeping: Volkswagen is currently number one in Europe with its EV models. Who will make the race?

    Read

    Commented by Fabian Lorenz on December 1st, 2022 | 11:55 CET

    Comeback stocks: Nel, Aurora Cannabis, Barrick Gold, Tocvan Ventures

    • Mining
    • Gold
    • Hydrogen
    • Cannabis

    Gold, cannabis and hydrogen could be among the top trends of the coming year - also on the stock market. Due to full order books, Nel could be poised for a comeback in 2023. At least sales are already secured until mid-2024. Now, all that is left is to cut the loss to reach analysts' price targets. Aurora Cannabis has largely completed its turnaround and is also hoping for legalization in Europe and the US. Driven by a strong gold price, mining stocks have already jumped. Now exploration companies should follow. Tocvan Ventures is one of them. And with the gold explorer, investors can look forward to a regular news flow in the coming year. Are the three candidates comeback stocks in 2023?

    Read

    Commented by Stefan Feulner on December 1st, 2022 | 09:46 CET

    BYD, Auxico Resources, Hensoldt, Rheinmetall - Prepared for the future

    • Mining
    • Gold
    • RareEarths
    • Defense

    Russia's invasion of Ukraine at the end of February this year changed everything. While global stock markets fell into a state of shock, shares in defense companies boomed. With the arms buildup in the Western world, the future looks bright for companies that were still viewed critically before the war of aggression. However, in order to produce enough tanks, aircraft and other war equipment, the industry needs a variety of critical metals for which demand already exceeds supply.

    Read