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January 7th, 2022 | 11:46 CET

Varta, Nordex, Kodiak Copper: The 100% opportunity with copper in 2022!

  • Copper
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The climate decisions made in Glasgow in November are casting their shadows far ahead. It is becoming clear to the protagonists: electromobility and efficient electricity storage are increasingly important for the energy transition. Consistent decarbonization requires research, development and production of drives, batteries and components. The red conducting metal copper is an essential component of electrical components of all kinds. Today, an e-drive vehicle requires three to four times the amount of copper as an internal combustion model, plus the great demand in industrial manufacturing processes. The earth's reserves are exhaustible, and copper, in particular, is pretty much on the edge. We take a look at some interesting investment opportunities.

time to read: 4 minutes | Author: André Will-Laudien

Table of contents:

    Copper at just under USD 10,000 at the turn of the year

    As a relatively soft metal, copper is tough and easy to shape. As an excellent conductor of heat and electricity, it has many uses. High-tech, wind power, e-mobility and the infrastructure economy, the daily demand for copper is growing and is reflected in market conditions. The spot price of the coveted metal thus rose from around USD 8,000 to USD 9,700 in 2021. In the meantime, it has even reached USD 10,720. As a result, the commodity was one of the top performers in the commodity sector. As there are very few mines capable of production, the market focuses on interesting properties that can go into production in the next few years.

    Kodiak Copper - A successful year in British Columbia

    An attractive supplier for the tight consumer markets in a few years is Kodiak Copper, an explorer from British Columbia. Kodiak's MPD property is located in the Gate Zone, close to well-known mines such as Copper Mountain, Highland Valley and New Afton. The Company completed a major program in 2021 and is now looking forward to the coming year with commitment. With new efforts, copper value in the ground is expected to reach new heights.

    Kodiak completed the most extensive drilling program in its history in 2021 and has recorded additional discovery successes at every step. The designated size of the gate zone increased significantly due to exploration. Despite extraordinary challenges due to numerous fires, the team successfully completed 21,675 meters of drilling in 36 holes, a prospecting and trenching program including 1,755 soil samples and 176 rock samples, as well as IP surveys, geological and geotechnical studies and environmental surveys, all on budget. Mineralization has been intersected to date over a length of 950 meters, at a depth of 850 meters and over a width of 350 meters - dimensions typical of other large, multi-center copper porphyry deposits in British Columbia. In 2022, this will be followed by an extensive exploration program in the MPD license area.

    Kodiak shares are currently trading around CAD 1.34, providing a market capitalization of CAD 66 million. Given tight copper markets, this is a good starting position for 2022.

    Varta - Arrived at the critical mark

    A large consumer of copper is the battery manufacturer Varta AG from Ellwangen, Germany. The share experienced ups and downs of emotions in 2021, investors were even able to temporarily gain up to 50%, but in the end, the share just missed the initial level of the start of the year at EUR 118.

    Nothing but expenses? One has to give Varta credit because the management is precisely in tune with the spirit of the times with the development of a new automotive high-performance battery called "V4Drive". Unfortunately, the developments around the super battery devour insane R&D expenditures. Because of the long development period, Varta AG is not a short-term speculation object. Even on the contrary: the two smaller retractions in the forecasts repeatedly led to dents in the share price, which always generated annoying negative returns for the late entrant. With Varta, the investor can only continue to trust and hope for success in 2023/24 - then the profits will probably really bubble up.

    Until then, the chart can oscillate at will between EUR 110 and 140 and work off every Nasdaq swing and Tesla hype benevolently. Only the bastion at EUR 105 must not fall, then the world of the Swabians remains in order.

    Nordex - Programmed for strong growth

    Nordex SE from Hamburg is also a great hopeful value. This share has also been on a wild roller coaster ride. The group is currently building on a very strong order book that extends far into 2023, and the wind turbine manufacturer's capacities are almost fully utilized.

    Unfortunately, Nordex has often sold itself too cheaply in its pricing and suffers from supply chain problems with important components. As a result, customers have to pay penalties in the event of delays, which have a corresponding impact on margins. According to analyst consensus, sales are expected to remain constant at around EUR 5 billion in the coming year, but EBITDA is expected to almost triple. According to available estimates, real net profits will not be achieved until 2023, when the strongly growing Company will also be better able to finance itself. Considerable debt was converted into equity only in the summer, which temporarily depressed the share price by more than 30%.

    The 2021 balance sheet for Nordex stock is minus 36%. At EUR 13.8, the current price is now a full 50% away from the high of around EUR 27. In chart terms, a bottoming process is currently underway, which should no longer fall below the low of EUR 12.7. Initial positions could bring joy in the medium term.

    The copper shortage will continue to haunt us in 2022. That means high purchase prices for Varta and Nordex. For the copper explorer Kodiak Copper, the valuation of the MPD property increases with each new drilling result and a parallel high metal price.

    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

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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