Trump is back! Buy commodities; hydrogen is on the sidelines! Siemens Energy, Globex Mining, Nel and Plug Power

Nel ASA and Plug Power – Further sidelined by Trump

After Trump's election in the US, the two hydrogen companies Nel ASA and Plug Power are no longer on investors' buy lists. Both stocks lost between 10 and 15% last week. It is currently unclear when calm will return to the stocks, as sentiment is at rock bottom. On October 16, the Norwegians opened their books and presented their results for the third quarter of 2024. A loss per share of NOK 0.07 was reported, which was well above analysts' estimates of minus NOK 0.057 per share but still above the minus NOK 0.14 from the same period last year. Revenues rose slightly from NOK 303 to 366 million, while NOK 407 million was expected. The US bank Morgan Stanley reacted quickly and lowered its rating from "Equal-weight" to "Underweight". The target price was slashed from NOK 9.0 to 3.5. This revaluation shows the great uncertainties regarding the growth opportunities for hydrogen specialists, especially in the US market.

There, the 10 times larger competitor Plug Power is suffering a similar fate. Investors are already trembling in the run-up to the quarterly figures expected after today's trading. In the last 10 days, the price has fallen again accordingly to around USD 2.00, but recently, it rose to around USD 2.40 on high turnover. The capital increase via the market, which has been ongoing since the summer, was increased again by USD 375 million to almost USD 1 billion. Plug Power still appears to have empty coffers. Investors are likely eager to hear the outlook from its flamboyant CEO, Andy Marsh. High volatility and a sour mood across the entire sector do not suggest a quick investment. For safety reasons, stay in observation mode!

Globex Mining – Ideally positioned in the commodities sector

In the context of the global shortage of metals and the search for secure sources of supply, the properties of Globex Mining are coming into focus. Located primarily in Quebec, the Company has all the advantages in the international race for favored locations: energy, good infrastructure, a mining-friendly jurisdiction, and good contacts with the indigenous owners of the land. Currently, CEO Jack Stoch is overseeing his 252 projects and 106 royalty contracts, providing a solid foundation for the future. Additionally, Globex holds readily liquidatable shares and cash of around CAD 25 million. The company is entirely debt-free.

This year, the price of the Canadian explorer and asset manager had already risen by more than 30% to CAD 1.15, and in recent days, news has been increasing again. Partner Cerrado Gold Inc. reported that the funds from the sale of its Monte Do Carmo project in Brazil will be used in part to complete a feasibility study for the "Mont Sorcier" iron ore project, in which both Chibougamau Independent Mines and Globex Mining Enterprises own between 1 and 2% gross metal royalties. Globex also holds 11 million shares of Electric Royalties, which will collect a 1% royalty on vanadium production from the property. Cerrado holds a 100% interest in the Mont Sorcier iron ore and vanadium project, which has the potential to produce a high-quality iron ore concentrate over a long mine life with low operating costs and capital intensity.

Reports of this kind keep coming in, and the intrinsic value of Globex Mining is increasing noticeably as a result. Nevertheless, at CAD 1.03, Globex's shares are anything but expensive. With 56,294 million shares issued, the market value of all properties, after deducting cash reserves and liquid shares, is less than EUR 20 million. This value should soon see a strong rebound.

Siemens Energy – All-time highs ahead of the annual results

Siemens Energy's stock has seen a roaring development. The energy group has gained over 300% in the current year - the reason is that Europe, in particular, is looking for a constant renewal of its energy infrastructure. With gas turbines and extensive knowledge in the construction of power lines and networks, the Munich-based company is involved in almost all international tenders. Analysts at Deutsche Bank have closely examined their forecast for Siemens Energy and are raising the target price in the base scenario from EUR 38 to EUR 43. Investors, however, are excited about the best-case scenario: here, the experts even believe the value could jump to EUR 70. This is a prospect that makes one sit up and take notice because, in addition to the almost endless AI potential, the Frankfurt analysts believe in a multi-year boom in the energy sector due to the EU's "NetZero" efforts.

Tomorrow's reporting day, when Siemens Energy will present its results for the fourth quarter and the full fiscal year 2023/24, ending September 30, 2024, will be exciting. Many bank analysts expect positive momentum, particularly from strong business in gas turbines and transmission technology. However, a question mark remains over the wind power subsidiary Gamesa, which has been struggling with operational difficulties for months now and has repeatedly slowed the positive momentum of the share. The consensus view is that annual sales for 2024 will be EUR 34.48 billion, with the free cash flow expected to rise again to over EUR 700 million. With further sales increases of around 10% in 2025/26, the P/E ratio should then also fall to a tolerable 19.5. On the Refinitiv Eikon platform, only 8 out of 18 analysts remain positive, and the average price target is set at EUR 36.40, around 10% below the current price. Caution at the platform edge! Cautious investors might want to consider selling before the earnings report.

The US has voted. This sets the course for many shareholders, because stocks from the defense, industry, and security sectors are in demand again. Since the new president is not supportive of climate change, this will likely have a negative impact on international capital allocations in the "green tech" sector. However, the demand for raw materials is expected to remain high, making Globex Mining shares a top choice.