April 26th, 2022 | 10:19 CEST
Stocks for bargain hunters: Mercedes-Benz, Power Nickel, Netflix
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"[...] China has become the manufacturing capital of the World, and because of its infrastructure, expertise and capabilities, Silkroad Nickel has strategically positioned itself to partner with Chinese companies in the Stainless Steel and EV industries [...]" Jerre Foo, Corporate Development Executive, Silkroad Nickel
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.
Mercedes-Benz: A lot is happening here
The Mercedes Benz share has lost 10% of its value in the past three months. Although the share has recently recovered, it has not been able to buck the general negative trend. In fact, there is a lot of good news around Mercedes-Benz. Just recently, a sedan from the Swabians drove 1,000 kilometers on just one battery charge. That is nothing new, but it is in a Mercedes. Breaking the 1,000-kilometer barrier is also an indication that Mercedes-Benz has caught up with the competition in terms of technology, including electric drives. However, the car company has put on the left turn signal with another headline: Mercedes is looking for 3,000 software engineers. If it succeeds in luring IT specialists to the auto industry, Daimler could finally move into the fast lane.
For years, the Sindelfingen-based Company was considered an innovator. In the meantime, however, things have changed. Companies like Tesla have been able to gain an edge with their bold approach and are considered number one by many young and affluent target groups. But the brand with the star retains its charisma. Coupled with its new course, Mercedes-Benz could soon take off again.
Power Nickel: Many irons in the fire, decisive weeks ahead
Companies like Power Nickel could benefit from the electrification of mobility. The Company combines several prospective commodity projects into a promising mix: In addition to the NISK nickel project in Quebec, which is considered the flagship, the Company also offers several gold properties in Canada and Chile, as well as a license agreement with Teck Resources. A resource estimate on the NISK project is expected to be released before the end of the second quarter. Power Nickel is managing to spend less capital on this than would typically be the case, based on historical data. In a recently published interview, CEO Terry Lynch speaks of savings of up to CAD 7 million.
The infrastructure around the project, with several producing mines in the immediate vicinity, also speaks for Power Nickel's starting position. Otherwise, the Company, in the person of CEO Lynch, is down-to-earth and does not believe in full-bodied promises. "The results that are still outstanding could stand for higher grades measured against the historical data, but I do not want to anticipate the concrete figures that we will announce in the coming weeks," says Lynch. The CEO also sees potential for re-rating in Power Nickel's gold operations, which the Company plans to spin off into a new company later this year. "Existing shareholders of our Company are to receive shares. However, Power Nickel will retain an 80% stake in Consolidated Gold & Copper for the time being because we believe the current valuation level is extremely low," Lynch said. The subsidiary's listing toward the end of the year is expected to be flanked by a drilling program at the Golden Ivan project. In a market phase in which industrial metals are scarce and gold is again gaining importance as a safe haven, Power Nickel offers an exciting mix. The share is still hardly in the focus of the market.
Netflix: The new trend is analog
Netflix, on the other hand, has been the talk of the town lately. The subscription service for video content lost a whopping 42% of its value in the past three months. The declining number of customers, in particular, has unsettled investors. After the fitness service Peloton had to digest its post-pandemic shock, it is now Netflix's turn. Many subscribers are likely to enjoy freedom again to a greater extent in view of the Corona relaxations. To this end, young people in particular - Netflix's target group - prefer to move to clubs, cafés or parks. The outdoor movie season also beckons and promises a touch of 2019. Netflix remains a promising business model. For the time being, however, the heart of users beats more for analog delights.
While stocks around tech and future solutions are still ambitiously valued, automotive industry representatives are gradually moving upwards. Strong brands coupled with innovations could continue to ensure growth in the future. However, companies like Mercedes-Benz also need to rethink long term: supply chains should be redundant in times of crisis. That autocracies are reliable partners for business has been exposed as an illusion. Here, young companies like Power Nickel come into play - pushing ahead with promising projects in Canada and the American continent.
Conflict of interest
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