October 10th, 2022 | 12:16 CEST
Plug Power, Pathfinder Ventures, Varta - Which shares are a bargain?
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"[...] In addition to campsite fees, Pathfinder Ventures has put itself in a position to offer all of these sought-after camping solutions. The only thing they don't sell is the RV itself. [...]" Joe Bleackley, CEO, Pathfinder Ventures Inc.
Plug Power - Production of green hydrogen on the water
Plug Power is a top dog in the hyped hydrogen market. At least since the Democrats' bill in the US to pump some USD 375 billion into fighting climate change by 2030, the outlook for hydrogen is even brighter than before. Up to USD 3 per kilogram of green hydrogen is to be subsidized. Thus, the US wants to reduce its emissions by about 40% by 2030. A further tailwind comes from the Ukraine conflict, which has led to an energy shortage and, thus, skyrocketing prices, especially in Europe. Here, too, green hydrogen could provide a solution.
On August 25, Plug Power announced that it is intensifying its collaboration with Amazon. The groups plan to jointly develop fuel-cell electric trucks and fuel-cell power generation systems that could power Amazon buildings, as well as the use of electrolyzers in fulfillment centers. Starting in 2025, Plug Power will supply Amazon with nearly 11,000 tons of green liquid hydrogen per year. Amazon may also increase its stake in Plug Power by 16 million shares. On September 23, Plug Power and its partner Lhyfe announced the world's first production of green hydrogen on a floating platform. The project is now undergoing 18 months of testing.
Plug Power's share remains highly volatile. Already this year, the stock has halved in value, only to double again. From the last high on August 25, it recently went down more than 36%. Yet the Amazon deal brings the Company a big step closer to its goal of generating USD 3 billion in revenue in 2025. At the moment, one pays USD 19.90 for a share certificate. A total of 27 analysts have looked at the stock and come up with an average price target of USD 35. Whereby even the pessimistic analyst calls out a price target of USD 25. Those who bet on hydrogen are well served by Plug Power.
Pathfinder Ventures - Booking figures continue to increase
Looking at the registration figures for motorhomes from 2021, the Caravanning Industry Association e.V. announced a new record. The figures were 7.3% higher than those of the old record year 2020. Even the Corona pandemic could not harm the industry. While more and more people go camping and enjoy freedom and nature, there are still not more or new campsites. The situation is similar in North America, where many campgrounds are still family-run and not state-of-the-art. Here Pathfinder wants to take advantage of the boom and has started to buy up and modernize campsites. Family-friendliness and digitalization play a major role at the current three campsites. There are playgrounds and activities for the little ones, and WLAN and an online booking system for the grown-ups.
The Company is also expanding the Pathfinder Camp Resorts brand with special weekend programs for families. Customers are thanking it with many 5-star reviews on Google. The modern campsites are already attracting more customers. The Company announced on October 4 a 17% increase in occupancy in the third quarter compared to the previous year. Financial results will be released on November 28, but already in the second quarter, revenue was up 81% YOY despite a harsh winter in Canada. In order to drive growth, a 1,892-acre parcel of land was acquired back in April to expand the Agassiz camping resort. Permits for its use are expected shortly.
Additional campgrounds are expected to be added to the portfolio in the future. New projects will then benefit from the synergies arising from the operation of the first three resorts. The Company also plans to offer parking spaces for its customers' mobile homes in the future. The share is trading at just CAD 0.07, giving it a market capitalization of CAD 3.9 million. Revenues in the second quarter were around CAD 916,000. EBITDA was positive after losses in the previous year. Currently, the Company is investing in the expansion of its parks, which will lead to more bookings and higher revenues in the long term.
Varta - Herbert Schein to make V4Drive great
A reduction in Varta's sales forecast on a Saturday morning in August was followed by all forecasts being cancelled in September. Investors turned their backs on the stock in droves, sending it plummeting. The reasons ranged from supply chain problems at Varta's customers to rising energy and raw material costs to consumer restraint by end users forced to save by inflation. The best-selling product, button cells for wireless headphones, is currently experiencing sales problems. It has been reported that Apple's 3rd generation AirPods are in lower demand than expected. That is matched by the fact that two large orders from OEMs have been delayed at Varta.
Additional uncertainty among investors was caused by significant share sales from one-time Varta saviour Dr Tojner. Both before the forecast cut and before the resignation of CEO Herbert Schein, the major shareholder and head of the Supervisory Board sold shares. He should have been confident in the Company, especially because Herbert Schein is not leaving the Company but is to take care of building up the electromobility division. The V4Drive battery cell, which raised great hopes among investors, needs more time. Supervisory Board Chairman Dr Tojner commented, "Herbert Schein is an internationally renowned technology expert and has proven many times in his nearly three decades at VARTA that he can open up new business areas and develop them to the point of market leadership."
One share currently costs EUR 30, and now it depends on whether the support at EUR 28.66 on a closing price basis holds. A double bottom would be formed if this succeeds, and the share could start on the long road to closing the gap at EUR 58.62. Most analysts advise holding and see price targets between EUR 39 and 50. In its latest study, Warburg Research issued a buy recommendation with a price target of EUR 53. Most recently, Varta was represented at the 4th International Investment Forum. A recording can be found here.
Warren Buffet's maxim "Buy when everyone is scared and sell when everyone is greedy" has proven its worth. Based on the three examples, you can see that prices sometimes have downward exaggerations. Plug Power is the share to buy if you believe in the success of hydrogen. One has to endure the volatility. Pathfinder Ventures has a good concept, which is also working out, as seen from the figures. Nevertheless, initial investments are necessary to create the cash cow. Varta was doomed, among other things, by its great advance laurels. If the breakthrough with V4Drive succeeds, the Company will have created the next blockbuster after the button cells.
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.
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