18. November 2020 | 09:50 CET
SIXT, Nikola, Newlox Gold: New ways to higher returns
Successful companies often do things a little differently than their competitors. Sometimes it takes a while for an approach that is ridiculed at the beginning, to be approved, be successful and then copied. SIXT, for example, saw itself as a mobility service provider early on. The car rental Company operates in many areas and also offers leasing and used cars. Although business at the airports has mostly come to a standstill, SIXT is rightly considered flexible enough to be able to meet new requirements. The Company drastically reduced its vehicle fleet after the outbreak of the pandemic. SIXT will continue to invest in digital business models in the future, such as a monthly car subscription. This approach means that the share is now doing comparatively well again after a slump in March. The Company is not a crisis winner, but it does have a future.
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ISIN: CA65151R1001 , US6541101050 , DE0007231326
SIXT: No fear of red figures
The SDAX stock is about 7% up on a one-year horizon. In the past three months, it even rose by almost 25%. Although SIXT does not want to rule out losses this year, management and the market are mostly unimpressed: SIXT is still the industry leader as a digital car rental Company. It should not be ruled out that the Company may even be able to gain market share during the crisis, and that profits will continue to bubble up in the future.
The hydrogen pioneer Nikola also had plans to gain market share quickly. However, when rumors started to spread in summer that the Company with its engines might not be as far along as the market suggested, the share plummeted. In the last three months alone, the value halved. Most recently, however, it has risen by a whopping 16% in just a few days. Where is the stock heading?
Nikola: Trading profits ahead?
Most recently, JPMorgan analysts emphasised that the Company performed better than expected in terms of losses and liquidity. The analysts put the target price almost 100% above the current price. A few months ago, good Company key figures may have been acknowledged with a price fireworks display, but now the market is sceptical about Nikola. The past has shown that a battered reputation cannot be reversed so quickly. However, if the share manages to rise above the October high of EUR 22.00 on a sustained basis, a continued recovery could set in. The decisive factor for this is the domestic market on the US technology exchange, Nasdaq.
Newlox Gold: "Green" growth in Costa Rica
Free of scandals and extremely innovative is the small Canadian gold producer Newlox Gold. The Company recently resumed gold production in Costa Rica, which was on hold due to the Corona Pandemic. What makes Newlox unique is its innovative production method. Newlox collects the historical tailings of smaller mining companies and processes it further. Since many smaller companies in Costa Rica are not very efficient, this method of extraction is a profitable business for Newlox. Even the local mine operators receive a small amount for their tailings.
A few weeks ago, Newlox Gold reported the successful testing of a new process to extract gold from the rock. The unique thing about it is that Newlox does not use any toxic chemicals and does not waste precious water. As sustainable concepts increasingly influence mining, Newlox Gold is considered a pioneer in many respects. The Company feels comfortable in Costa Rica, appreciates the safe working conditions and also the quality of the historical tailings on site. Now that the first project is in production, Newlox intends to use the experience to advance further projects in Costa Rica. The goal is to go into production at a reasonable cost and achieve profitability quickly.
Sustainability - more than a fig leaf
The share price has risen by ten percent in recent weeks and recently reached its all-time high. The investment story around sustainable mining seems to be well received by investors. However, the share should only develop its full potential if Newlox pushes ahead with organic growth and new projects as planned. Whether in the area of mobility or mining: sustainability pays off. While for Companies like SIXT, it's the positive image and lean cost structures that count, Newlox stands out with its low risk and high acceptance by the population in developing regions.