26. February 2021 | 08:33 CET
Varta, Nevada Copper, Xiaomi - Electromobility & Innovation: Power duo for rising share prices!
The electromobility sector is said to have bright prospects. Closely linked to this is the question of intelligent and efficient forms of energy storage. Innovations are often the deciding factor in leaving competitors behind and generating higher margins and profits. One should not forget the "ingredients" for success, these being raw materials such as copper. We present three power stocks for your portfolio.
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ISIN: DE000A0TGJ55 , CA64128F1099 , KYG9830T1067
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
VARTA AG - Value and Price
In the last weeks, the share has reached a new all-time high of EUR 181,20 EUR. Still, in the middle of February, the share certificates were quoted with over EUR 160. However, after the preliminary figures' announcement for the past fiscal year on February 18, the share fell sharply. Overall, analysts became more skeptical. There are no longer any experts who recommend buying the shares. So: hold or sell?
At first glance, the figures and the reaction of the share price and analysts do not match. The battery producer has had the best financial year in its 135-year history. The strong market position in microbatteries, which are used in wireless headphones, among other things, provided the Company with high growth. Sales rose by 140% to EUR 870 million, also as a result of an acquisition. Without this acquisition, the increase would still have been an impressive 47%. Adjusted operating profit (EBITDA) increased by 145% to EUR 239 million. Both sales and profits exceeded analysts' forecasts as well as targets formulated by the Company itself.
So, where does the skepticism come from? Firstly, one simply has to look at the powerful performance with a share price increase of up to 50% since the beginning of the year. Subsequently, this led to price regions that have to be classified as excessive. Now, however, the share is trading again at approximately the starting level of around EUR 116.
The impetus for analysts was lower than expected corporate targets for the current fiscal year. The technology and innovation leader wants to achieve sales of EUR 940 million - analysts had expected more than EUR 1 billion in the majority of cases - and increase the adjusted EBITDA margin by up to 30%. In the best-case scenario, this meant Varta would then generate an operating profit of EUR 282 million in 2021. This prospective growth of 18% is probably too little for market participants. But it would not be the first time that Varta has raised its forecasts. The share price should also rise again.
NEVADA COPPER CORP - slight delays in ramping up production
Late last week, Nevada Copper released new information on production at its Pumpkin Hollow project's underground mine. Nevada Copper is an emerging copper producer in the US state of Nevada. The Pumpkin Hollow Copper Project has significant reserves and resources of copper, gold and silver. In addition to the underground mine, an open-pit project is under development.
Despite higher production rates, a series of unplanned shutdowns, including mechanical problems, have prevented the project from reaching its original target of approximately 3,000 tons per day for the current production. The average production rate so far in February has been around 1,600 tons per day. The retrofit work to correct the problems encountered will be completed within the next few weeks. In Q3, the Company expects to process a significantly higher 5,000 tons of ore per day.
The stock has long been among the most active 20 securities by trading volume on Canada's home exchange, the TSX-Venture. The Company is currently worth CAD 255 million. Analysts see an upside potential of a good 50% from the current share price level.
XIAOMI CORPORATION - Cool, right?
Xiaomi Corporation was founded in 2010 and listed on the Hong Kong Stock Exchange in 2018. The internet Company focuses on smartphones and smart hardware connected by an IoT (Internet of Things) platform. The Company's vision combines high quality and affordable prices. At the same time, Xiaomi has another high aspiration and wants to build a trusting, even friendly relationship with its customers and be considered the "coolest company." An exceptional approach, but one that also explains the success and rapid market penetration of its products.
Xiaomi is the fourth-largest smartphone brand in the world. Even more notable, the Group has built the world's largest consumer IoT platform. More than 213 million smart devices (excluding smartphones and laptops) are connected to the platform. Globally, the Group's products are available in more than 90 countries.
The Company is currently valued at the equivalent of EUR 71 billion and has a 2021 P/E ratio of 35. In addition to smartphones and IoT, the Company is active in other fields such as lifestyle products and e-mobility. Investors should take a closer look at Xiaomi.