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May 13th, 2024 | 06:30 CEST

Rheinmetall, Power Nickel, Bloom Energy - Will the rally continue?

  • Mining
  • Gold
  • Lithium
  • Commodities
  • Defense
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After a brief pause in recent weeks, the rally in Germany's leading index, the DAX, has continued unabated, with the target of 19,000 points already in sight. Defense stocks remain the undisputed top performers. Another sector that has taken center stage in recent weeks is commodities. In addition to gold, silver and copper, the industrial metals lithium and nickel are also forming solid foundations for the next upward impulse. Corresponding companies were already running ahead of the base value.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: RHEINMETALL AG | DE0007030009 , Power Nickel Inc. | CA7393011092 , BLOOM ENERGY A DL-_0001 | US0937121079

Table of contents:

    Rheinmetall - A big piece of the pie

    One thing is already certain. The arms industry, which was still classified as "socially harmful" before the war in Ukraine, has now become one of the growth sectors of the coming years. This has been made possible by the turnaround, which, after years of hesitation on the part of states, has made armaments the focus of governments. Rheinmetall, the Düsseldorf-based integrated technology group and supplier to the German Armed Forces, is right in the middle of it all. Since the beginning of the conflict in Eastern Europe, its share price has risen by around 400% to EUR 535.80.

    According to Rheinmetall AG CEO Armin Papperger, the development of the Company is expected to accelerate further. He described the reason for this in an interview with the "Süddeutsche Zeitung". According to him, he expects large orders from the German government's EUR 100 billion special fund. "You can assume that between EUR 30 and 40 billion will ultimately come to us from the special fund," commented the manager.

    He also gave German politicians some advice for the time after that so as not to jeopardize the turnaround after 2026. If the special assets for the German armed forces are used up, there are only two options, according to the Company boss. Either new debt is taken on, or there is a reallocation from the budget. The Rheinmetall boss also advocated that large European arms companies join forces to play "in the same league as the Americans".

    Despite the increase, Rheinmetall shares remain popular with analysts. In a recently published study on defense companies, the analyst firm Hauck & Aufhäuser issued a price target of EUR 680.

    Power Nickel - Further potential after share price multiplication

    After the brilliant rally in the industrial metal nickel, which is fundamental to the energy transition, in 2022, an equally drastic correction set in. The price of the base value lost over 70% of its value from a high of just under USD 50,000 per ton. For a few months now, a stable floor has been forming in the USD 18,000 per ton range, similar to other critical metals. By contrast, various exploration companies have already gained significant ground and will likely be ahead of the market. For example, Power Nickel, a company focusing on the development of the high-grade, 80% owned Nisk project, Canada's first carbon-neutral nickel mine, put in a share price performance of its own. With a share price increase of 230% to CAD 0.68, Power Nickel was one of the best performers on the market.

    The reasons are obvious. On the one hand, as with many other Canadian mining stocks, there was a high short ratio, which disappeared into thin air with the announcement of outstanding drilling results. Responsible for the short squeeze was the fact that not only nickel, platinum, and palladium were detected at Nisk as expected, but high-grade quantities of gold, silver, and copper were also explored. Drill hole PN-24-047 intersected 8.44 g/t platinum, 6.25 g/t palladium and 0.58% nickel over 14.42 meters, as well as 0.59 g/t gold, 69.14 g/t silver and a high grade of 8.17% copper.

    To further advance Nisk's exploration program, internationally recognized geoscientist Dr. Steve Beresford, who has conducted exploration work in 66 countries, primarily in magmatic nickel-copper-platinum group element deposits, has also been engaged.

    Bloom Energy - Strong figures and Intel cooperation

    Bloom Energy, the developer of fuel cell technologies, is still far removed from the share price performance of Rheinmetall AG and Power Nickel. Since the annual low of USD 8.45 in mid-February, however, the Californians have formed a bottom formation, which would be completed if the downward trend established since February 2021 at USD 14.63 were to be broken. In the event of a sustained break, the next significant resistance would only be in the USD 26 range, which would mean more than a doubling of the current price of USD 12.06.

    Following the announcement of the figures on Friday, the signs were good that the fuel cell company could overcome the next hurdle. With an increase of over 7% at the start of trading, the value then fell due to a weak performance on the Nasdaq technology exchange, ending the trading day with a loss of nearly 5%.

    Bloom Energy reported a reduction in its loss for the first quarter of 2024 to USD 57.5 million or USD 0.25 per share compared to a loss of USD 71.6 million or USD 0.35 per share in the same period of the previous year. Revenue, on the other hand, fell by 15% year-on-year to USD 235.3 million, including an 11% decline in product and service revenue to USD 209.80 million. Despite declining revenue, the Company confirmed its annual revenue forecast of between USD 1.4 billion and USD 1.6 billion.

    The announcement of the expansion of a cooperation with Intel had a positive effect. Bloom sees its long-term future in the data center market. The agreement with Intel provides for additional capacity for Bloom Energy's fuel cell-based servers in an existing Intel data center in Santa Clara, California.

    Due to the turnaround, Rheinmetall AG's order books should continue to be full to bursting. Bloom Energy announced a far-reaching cooperation with Intel. A short squeeze was triggered at Power Nickel by surprising discoveries of gold, silver and copper.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also 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.

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    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

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