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November 11th, 2020 | 14:15 CET

Tesla, Defense Metals, HelloFresh: Who makes a 468% return?

  • Rare Earth Elements
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When Tesla advertised its electric sports car around 10 years ago and let journalists drive the chic little vehicle around Germany, the Company was a highly speculative affair. The electric pioneers now have various vehicles on offer and are market leaders in their field. But that does not stop the share from making huge profits: The Tesla share climbed by almost 470% within the past twelve months.

time to read: 3 minutes | Author: Nico Popp
ISIN: CA2446331035 , US88160R1014 , DE000A161408

Table of contents:

    Tesla and China are tightening the rare earths market

    Another reason for success is the excellent flexibility of the Company. As soon as criticism is voiced or analysts warn of shrinking margins, the team around visionary and Tesla founder, Elon Musk, have an ace up their sleeve. To be competitive on the Chinese market, the engineers adapted the composition of the batteries and thus saved a few more dollars: shareholders and analysts like these tricks. Tesla will also have to be flexible in the future: The Company needs several critical metals for its batteries. These are still highly competitive in the global market. What's more, Tesla's customers have the claim that the raw materials used in the fancy electric cars have been extracted as sustainably as possible. Many projects from Africa or even China fall away with this claim. Producers from North America and Europe are moving into focus.

    But the market for critical metals is becoming increasingly tight. Most recently, the investment Company Fortress Value Acquisition Corp, reported the planned takeover of the North American rare earth producer, MP Materials. Next Friday, the shareholders of MP Materials are to decide on the acquisition. MP Materials' flagship project is considered the most critical rare earths producer in North America. At the same time, China has introduced a new law to ensure that economies that make the export of these critical metals difficult, can be sanctioned in the future. Smaller countries, in particular, could collapse under pressure from China.

    Defense Metals: Investors will know more by the end of March

    The small Canadian Company Defense Metals could benefit from this development. The Company is focused on rare earths and reports 4.9 million tonnes with an average content of 3.02% of light rare earth metals. Inferred resources include 12.1 million tonnes at a grade of 2.9% light rare earths. It was only late last month that Defense Metals raised new capital to justify the economics of its rare earths project through additional measures. The Company plans to report results by the end of March 2021.

    Given the low market capitalization of about EUR 6 million and the recent developments in the industry, the Company appears promising. Although small caps carry the risk of increased volatility, a revaluation is in the air, especially after proof of long-term profitability. Such developments can benefit speculative investors.

    HelloFresh: When crazy ideas become mainstream

    All early shareholders of HelloFresh must also be considered speculative investors. Just one year ago, the concept of food boxes by mail, which bring everything you need to cook at home, was deemed to be interesting, but at best an exciting niche. But then came Corona. The pandemic brought HelloFresh excellent business figures. Now it's time to defend the market shares we have gained. On a one-year horizon, the share price increased by 157%, but recently came down a bit. Even though the share still has a good portion of Corona fantasy slumbering in it, the potential seems to have been exhausted: The share is ambitiously valued, and growth appears limited.

    Defense Metals as tomorrow's winner?

    In a phase of change, investors should distinguish between short-term and existing trends. Climate change will continue to support interest in electric vehicles. Tesla has also built up a compelling brand image. Although the stock is already expensive, its value remains one of the most promising blue chips. In the small caps segment, investors can focus on suppliers, without whom Companies like Tesla cannot continue their success story. One such supplier could be Defense Metals, the Canadian rare earth Company. Rare earths are urgently needed not only in batteries but also in almost all electrical appliances and in Canada, these rare earths are sustainably mined too. When evaluating future opportunities, it is the prospects that matter.

    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.

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    Der Autor

    Nico Popp

    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.

    About the author

    Related comments:

    Commented by André Will-Laudien on February 19th, 2021 | 10:25 CET

    Defense Metals, BYD, NEL, Plug Power - Rare earths, who is the fastest?

    • Rare Earth Elements

    Scarcity is the issue in 2021! Western governments have completely miscalculated regarding technological progress. They are now being driven by the industry; decisions that should have been made 5 years ago are now being followed abruptly. Since Battery Day in mid-September 2020, it has been clear that a technology giant like Tesla, led by Elon Musk, will enter large-scale battery mass production. What is missing is the complete closing of ranks between battery and car manufacturers so that the produced and expensively developed high-performance batteries are also installed in e-cars through corresponding demand. In coordination rounds between the automotive industry and the EU, the decision has probably already been made: E-mobility will come, and it will come in the big version...!


    Commented by Carsten Mainitz on January 26th, 2021 | 08:05 CET

    Lynas Rare Earths, Defense Metals, Arafura Resources - Rare Earths: still in time to get in before the boom!

    • Rare Earth Elements

    China has dominated the rare earths market for a long time. A supply shortage in the People's Republic and a substantial increase in demand can lead to a massive price increase of the commodity group at any time. These price increases are then often reflected in the share price of relevant players. Rare earth metals are in demand in a wide range of industries and to close the emerging supply gap the production of rare earth metals must be increased outside of China. We present three opportunity stocks that will benefit from industry trends and scarcity prices as producers or prospective producers.


    Commented by Nico Popp on January 18th, 2021 | 09:48 CET

    BYD, Defense Metals, Nornickel: Still investing in electromobility?

    • Rare Earth Elements

    Electromobility is a trend that is making waves on the stock market: Car manufacturers such as Tesla or BYD are benefiting from the rising demand and the vision of the future, but so are commodity companies. The reason: If you want to drive electric cars with low emissions, you need more raw materials for energy storage and motors than for classic combustion engines. Typical candidates are copper, cobalt, or lithium. Rare earth metals play a unique role. So far, most of them have come from China - and some are mined under dubious conditions. But anyone serious about sustainability must look at the entire value chain when it comes to electromobility and pay attention to raw materials from producers with a good ESG profile. For raw material companies outside China, this is an opportunity.