July 21st, 2021 | 11:00 CEST
Standard Lithium, Almonty Industries, Newmont: Invest in the super commodity
Table of contents:
"[...] While tungsten has always played an important role in the chip industry, it is now being added to batteries for e-cars. [...]" Lewis Black, CEO, Almonty Industries
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Standard Lithium: What uplisting means
The Standard Lithium share shows that raw materials are anything but boring investments. The Company is poised to become the lithium supplier of the USA. This prospect has led to spectacular price gains on the stock market: the share price has risen by almost 50% during the past three months alone. What is the reason for this, and is the hype sustainable?
Standard Lithium recently switched to the New York Stock Exchange. Such an uplisting usually draws the attention of new investor groups to a share, including funds or ETFs whose investment universe is in that particular stock market segment. The Standard Lithium share, for example, was included in the ETF portfolio of the provider REMX. The stock's appreciation suggests that it was undervalued in previous months and that the market is shedding valuation discounts with the stock's new visibility. But ETFs, in particular, aren't exactly considered the smartest investment vehicles. Buying is usually done solely based on membership in a specific index. When a new inclusion in an index meets with low liquidity of the stock, such price movements occur. As a result, many existing shareholders sit on book profits. Since the share has not shown momentum for a few days, these old shareholders could soon lose their nerve. A new entry does not make sense here.
Almonty Industries: Tungsten as the raw material of the commodity sector
The share of Almonty Industries also ran sideways in the past three months. The specialist for tungsten already operates tungsten projects in Southern Europe and recently celebrated a Groundbreaking ceremony for one of the world's largest tungsten mines in South Korea. The Sangdong mine is the largest tungsten project outside China. The mine is of great strategic importance, as China dominates about 85% of the global tungsten market. Many people know tungsten as the filament in classic light bulbs. But the metal can do more. It has unique properties in heat resistance, which is why it is also used in aerospace, and the mining industry uses tungsten drill heads, for example.
Given the extremely tight tungsten market and China's large market share, tungsten can be considered a critical metal. As new technologies require more and more raw materials to be extracted, the demand for drill heads is also increasing, as is the general need for heat-resistant alloys in industry. The Sangdong mine is being financed by the German Kreditanstalt für Wiederaufbau, among others. In addition, supply contracts have already been signed with the Plansee Group from Austria for the next fifteen years. The equity research analyst First Berlin defined a price target of CAD 1.50 for the shares of Almonty Industries - currently, the value is trading at about half.
Newmont: What can the big ship do?
If you want to invest in commodities, you could also get the idea of betting on the heavy ships of the industry. A typical representative is the world's largest gold producer, Newmont. The Company also has copper on offer. The latter commodity, in particular, offers investors a stake in some future trends, such as electromobility. In addition, Newmont has been able to increase its sales in recent months due to higher commodity prices. With a giant corporation like Newmont, it is also essential to remain efficient, and here management has applied the red pen and effectively cut costs. Shareholders were also rewarded, receiving higher dividends. However, with a dividend yield of around 2%, the stock is still not a high flyer. The yield is also very limited - on a one-year view, the stock fell by about 2%, so it was a zero-sum game for shareholders even after dividends.
The Newmont share is quite solid and has a little to do with raw materials - but nothing more. The copper business is hardly a factor in the share price. In contrast, stocks like Standard Lithium show what is possible with commodity stocks. While the lithium share has already reached a high drop height for the reasons mentioned above, the metal tungsten, which is only dull at first glance and which Almonty Industries will mine in the largest mine outside China, could be a welcome alternative for investors.
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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.