11. March 2021 | 10:40 CET
Silver Viper, Plug Power, FuelCell Energy - Silver and Hydrogen - Get in or get out?
The battle has broken out on the stock exchange. One side thinks the level has been way too expensive for a few months. The other side talks about momentum and unprecedented liquidity that will not immediately dwindle even with minor interest rate adjustments. Still, there was a tech sellout last week that disappeared as quickly as it appeared. Back and forth and back and forth - no one knows where stocks will end up in the coming weeks. One thing is sure though, the trading volume is gigantic and exceeds the highs of the last bull markets many times over. We take a look at silver and hydrogen.
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ISIN: CA8283341029 , US72919P2020 , US35952H6018
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
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.
Silver Viper - New drill results are convincing
The silver price remains the plaything of a wide variety of interests. The Reddit community wanted to ignite a short squeeze in silver at the end of the year; this calculation had been made without the central banks. Precious metal prices may not rise at all, as long as there is beautiful paper money. So the rise of silver was brought to an abrupt end at USD 30 and the spot price was sent back to below USD 24.
Silver Viper is a Canadian explorer, currently not yet concerned about the spot prices in silver but about its property in La Virginia. This property is located 220 km northeast of Hermosillo, Mexico. It is a vast exploration area known primarily for its epithermal precious metal mineralization with low sulfidation.
The property and historical exploration database were acquired under option agreements with two different parties. Silver Viper's most recent program included a total of 100 drill holes totaling 27,021 meters. The Company's drilling to date builds on a substantial database of historical work, including 52,635 meters of drill core from 188 diamond drill holes obtained by previous operators between 2010 and 2013. Silver Viper continues to expand this work by exploring the north and south in prospective untested terrain.
Silver Viper shares have shown a good increase from CAD 0.36 to CAD 0.72 following the recent success news and are currently hovering around CAD 0.60. The market capitalization is around CAD 48 million. One should expect more good results from Mexico during the year and if silver picks up, the Silver Viper stock is in.
Plug Power - short squeeze after sell-off
That was a powerful attack on the Plug Power share! After hitting a high of USD 76 as recently as early February, hydrogen stocks, and Plug Power in particular, took a steep dive. Last week the price reached USD 33, a loss of 57% in only 4 weeks. Currently, the price is trying to hold above the USD 40 mark. With a price-to-sales ratio of 100, the attraction of short selling was, of course, huge - now the first sharp correction has occurred. We had prepared you for such a scenario for a long time. The entire sector lost more than EUR 50 billion in market capitalization in just one stock market week, which is equivalent to Bayer AG's value.
The first wave of correction now seems to have been absorbed, so sit back and watch from the sidelines. It could be that the stock market has to work through a second wave of hydrogen euphoria. In the medium term, we see significantly lower prices in this sector.
We should take a closer look at an interesting announcement: SK Group plans to sell part of its stake in Grove Energy Capital, a special purpose vehicle set up to take over Plug Power. Specifically, up to 49% of the stake is to be transferred to financial investors. The value of the stake to be sold is estimated to be more than a trillion won, it kind of feels like someone has gotten it wrong?
FuelCell Energy - Far from making real money
A quick comment on FuelCell Energy. Here the high was USD 29.50 and the correction took us down to USD 11.0 - certainly the strongest sell-off in the hydrogen sector. FuelCell Energy, like all other companies in the sector, is, of course, not making a profit. A market cap of USD 12 billion for an estimated turnover of USD 70 million gives a turnover factor of 170 - rarely seen, should be on the tip of your tongue.
FuelCell Energy will soon have a quarter of a century of research behind it, with no profits. It may take some tinkering, of course, a few years of struggling, but at some point, you have to wonder if the business plan you are aiming for will ever pan out. The Company's latest quarterly results, released last week, underscore that point. The Company lost 8 cents per share, which was double what analysts expected. For the full year 2020, FuelCell generated USD 71 million in revenue, compared to USD 61 million for 2019. That's not the kind of hyper-growth you'd associate with a stock that just jumped 1,800%.
Bottom line: FuelCell stock will inevitably continue to fall because, at some point, the fundamentals will determine the direction, not the money of wild-eyed speculators. We continue to watch and report.