March 10th, 2021 | 09:56 CET
Varta, JinkoSolar, Nevada Copper: This is where speculators find what they are looking for
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Varta: Battery value full of advance praise
Varta is undoubtedly a brand that most investors should be familiar with. Decades ago, the Company's batteries were used in remote controls, portable radios and other small appliances. Even then, Varta stood for quality and durability. Today, Varta scores because its batteries often go an extra round while the competition is already running out of juice. And this is especially true for batteries for headphones or hearing aids. But the Varta share also has a good portion of electric car fantasy. But is this justified?
Varta has already landed government subsidies for electric mobility and has always developed further in the past. The Company is increasingly striving towards larger battery cells that can also be used in electric cars. Special batteries, such as those installed in robots or medical equipment, are also associated with Varta. As a result, the market around the share distributed advance praise in recent months. But in the meantime, disillusionment has set in: At the beginning of March, the share was only worth a little more than EUR 100 - as recently as mid-February, it was worth more than EUR 160. But the value is already slowly recovering. However, it remains to be seen to what extent the share will continue the price rally. Varta has run out of steam.
JinkoSolar: Dark clouds on the horizon
JinkoSolar is also in the doldrums. The share has lost around 37% of its value in the last three months. The Chinese Company with the US stock exchange listing produces solar cells, solar modules and complete systems around photovoltaics. Subsidiaries of JinkoSolar also operate solar parks. For some weeks now, the share has only been going down. This downward trend is due less to the Company itself than to the industry. Although JinkoSolar is one of the world's leading companies and can also successfully wage price wars, investors are better off watching the sell-off from the sidelines.
Nevada Copper: This share is a hot potato
In contrast, Nevada Copper's stock is sending signs of strength. The Company is on the verge of bringing its copper mine in the US state of Nevada fully into production. Copper is already being mined there as part of pilot work. Things could get going before the end of the first half of the year. Nevada Copper is well-known - and notorious - on the mining scene. Over the years, the Company has diluted its equity structure to around 1.8 billion shares. It looks like the Company's never-ending story is coming to a happy end. Lenders such as KfW have once again injected capital and the signs are now all pointing to production.
With the copper price currently rushing from one high to the next, Nevada Copper's stock could be an exciting alternative. While the Company has many outstanding shares and a high debt ratio, these conditions have also pushed the price down to the current level. Since 2020, the stock has come back to life and has recently consolidated after a price rally. Speculative investors can make a virtue out of necessity with Nevada Copper and position themselves in time. Now that the Company has taken a step towards full production, further steps could be in the pipeline to present itself to the outside world as a serious producer in the future. These could include share consolidation and other measures.
Furthermore, Nevada Copper offers the fantasy of an open-pit project close to the underground mine currently under construction. This open-pit mine has already been approved and could allow Nevada Copper to turn the very big wheel. While such a decision would require new investments, the market environment appears favorable given the copper and electric car boom. Nevada Copper is a company with rough edges, but that's what makes the stock interesting for speculative investors.
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