June 1st, 2022 | 12:10 CEST
Plug Power, Siemens, Triumph Gold - These stocks will outperform Tesla!
In times of high inflation and further rising interest rates, good advice is expensive for investors. Looking back at the correction that has already taken place in the stock markets, there could well be a stronger technical recovery at some point, but in our view, this would be more of a Bear market rally in the beginning economic downturn. The pressure comes via the long-term capital market interest rate, which gives investors high losses in bonds, but at the same time, offers new yield opportunities to those who shift out of the stock market. Historically, large interest rate increases are therefore accompanied by stock market losses. Here are three examples of stocks that could still be in demand in the next upward cycle.
time to read: 4 minutes
|
Author:
André Will-Laudien
ISIN:
PLUG POWER INC. DL-_01 | US72919P2020 , SIEMENS AG NA O.N. | DE0007236101 , TRIUMPH GOLD CORP. | CA8968121043
Table of contents:
"[...] Troilus has the potential to be an entire gold belt. All of our work to date points to this, and each drill hole makes the picture we have of the Troilus project much clearer. [...]" Justin Reid, President and CEO, Troilus Gold Corp.
Author
André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Tag cloud
Shares cloud
Inflation & rising interest rates - Inflation continues
The war in Ukraine has caused the prices of goods to gallop, and inflation in the euro area is higher than ever before. The ECB's highly regarded inflation indicator stood at 8.1% in May. Energy remains the number one price driver. The figure came as a surprise, as economists surveyed by the Reuters news agency had expected only 7.7% in advance. The inflation rate is thus more than four times higher than the ECB's target, which sees inflation of around 2.0% as the optimum level for the economy. Therefore, it is clear that the central banks will have to react and adjust their key interest rates further upward. A perfect scenario for the precious metals markets, especially gold – Canadian Yamana has just been taken over by South African Gold Fields for USD 6.7 billion. A new major among the top 5 thus enters the race. Gold stocks still seem dramatically undervalued from this perspective.
Triumph Gold - A small admixture in gold makes sense
At USD 2,070, the gold spot price marked a temporary 11-year high at the start of the war. However, it fell back steeply immediately afterwards to a deep USD 1,780. In the meantime, however, the yellow metal is fighting its way upward day by day. At the end of May, the USD 1,850 mark was reached again. Technically, the resistance zone of USD 1,870 to 1,920 is now in the room, which would be the last stop for a further technical movement in the direction of USD 2,000, which could actually be imminent with the high inflation figures.
Canadian explorer Triumph Gold Corp. has well-located claims in the Yukon, and they host three world-class mineral deposits named Nucleus, Revenue and Tinta Hill. The projects are located in the famous Dawson Range gold-copper belt in the state of British Columbia. Recent reports are now available on the Freegold Mountain property. The 2021 exploration work there included 6,615 meters of diamond drilling in the Blue Sky and Wau zones, as well as Revenue and Nucleus. Additional step-out drilling tested the Big Creek South and Orbit zones. Each of the above holes returned anomalous gold, silver and copper grades. The results indicate an extensive mineralized system with large tonnage containing oxide, transitional and sulphide mineralization. Work will now continue into 2022. Current resource estimates are approximately 2 million gold equivalent ounces, with further drill results expected in the coming months.
Ongoing work is currently focused on the Big Creek copper and gold deposit acquired in 2021. In the medium term, industrial copper availability is at risk, as indicated by historic lows on the LME metal futures exchange. Market experts predict that green technologies, which today account for about 3% of the global copper demand, will require about 9% of global copper demand by 2025 and as much as 16 to 20% by 2030. Triumph Gold owns both gold and copper and can change focus depending on market developments. Currently, the stock is trading between CAD 0.08 and CAD 0.10, which is a market valuation of just under CAD 12 million. First positions make sense at this level.
Plug Power and Siemens - Two standard values with a different profile
The Joe Biden administration's climate investments focus on hydrogen technologies for energy renewal. Nearly USD 1 trillion has been approved by the Senate to mitigate the US's heavy fossil fuel dependence. However, even the former stock market darlings are not spared in the current sell-off.
US-based Plug Power continues to report large new orders and numbers in line with analysts. Nevertheless, the share has already lost more than 50% of its value over a 6-month period. Meanwhile, the shares are trading at just 4.5 times estimated 2024 sales. Plug Power reported quarterly sales of USD 140.8 million with the latest numbers, an outright doubling from last year. For the full year, after some revisions by the analysis houses, it is now expected to be just under USD 920 million, with USD 2 billion already in the plans for 2024. In terms of profits, Plug Power could be the sprinter among the H2 specialists because breakeven is expected as early as 2025.
German technology giant Siemens has received the largest single order in its history from Egypt. Together with two partners, the Munich-based company has signed a contract to build the world's sixth-largest high-speed train system. Within a consortium agreement, Siemens alone will receive an order worth EUR 8.1 billion. That includes EUR 2.7 billion for the first line, which was already agreed upon last year.
Siemens is also heavily involved in the EU contracting process for alternative energy generation through its subsidiary Siemens Energy. The DAX-listed company topped expert estimates with its latest figures, but the stock has already corrected 20% from its January high of EUR 155. The investment is sweetened by a stable dividend yield of currently over 4%. Out of 11 available analyses, 10 give the stock a buy recommendation and an average 12-month price target of EUR 165.
The volatility, especially in the tech sector, is causing problems for investors. Meanwhile, the discounts are noticeable and also affect the standard stocks. In the current environment, gold investments seem suitable as an admixture. Bombed-out tech stocks such as Plug Power can slowly be considered again. Siemens is currently available for a P/E ratio of just under 13 and a sales valuation of 12, which is historically not a high valuation for the solid balance sheet of the global corporation.
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.