03. December 2020 | 14:29 CET
Xiaomi, Blackrock Gold, Nio - The way is clear!
It continues upwards, well this is how the three big US investment banks Morgan Stanley, Goldman Sachs and JP Morgen see it. Due to the positive results concerning a vaccine against the coronavirus, Morgan Stanley expects the economy to revive and expects long-term price increases. Year ending 2021, the experts see the price target for the S&P 500 at 3,900 points, which would be a healthy growth of over 7%. According to the analysts, stock-picking - the finding of "hidden treasures" on the stock market - will be particularly important next year.
time to read: 3 minutes by Stefan Feulner
The two rocks
Stock picking is also important for gold mining stocks. After the gold price has corrected since August from over USD 2,000 to currently USD 1,800, the chances are all the better of finding "hidden treasures" here too. One exciting Company is the Canadian explorer Blackrock Gold, which is working on two promising up-and-coming precious metal projects in the US state of Nevada. At the largest 100% controlled Tonopah West project on Trend Walker Lane in western Nevada, the Canadians reported last week the discovery of a new vein zone on target Victor and numerous high-grade gold and silver intercepts.
Andrew Pollard, CEO of Blackrock Gold, commented on the results as follows: "Our drilling that is expanding the mineralized zone at the Victor target continues to encounter exceptional values, and a new high-grade vein zone has been identified. We are the first to focus on this historic mine since its closure in 1930 due to low metal prices. We have refined our geological model of the massive mineralized structure encountered in drill hole TW20-001 (29 metres grading 965 g/t AuEq)". With results pending on several completed drill holes from numerous target areas, a continued positive news flow is expected for year-end.
In early November, Blackrock announced the start of a 3,500-metre drill program on the second project located in their Silver Cloud property. The area is attractive because the geology bears many similarities to the Hollister Mine operated by Hecla Mining. Exploration of whether Silver Cloud could be the western extension of the deposit is planned to be completed by year-end. Currently, management is considering transferring the Silver Cloud project to a new subsidiary as a spin-off, which could give the stock some more imagination. The market value is currently just under EUR 30.0 million. Since August, Blackrock Gold has lost more than 50% and is presently trading at CAD 0.66. Due to the very positive development, there is a lot of potential for hype.
Goldman wakes up
Such an upgrade, like yesterday, at the electric car manufacturer Nio is rarely seen. None other than Goldman Sachs, upgraded the paper from "sell" to "neutral". The price target was raised from USD 7.70 to USD 59 - an incredible increase. The positive trend is confirmed by the November sales figures published yesterday. Nio delivered a total of almost 5,300 electric SUVs, which is more than double the November 2019 figure. In the previous month, deliveries totalled 5,055 units. The electric car manufacturer had increased its production capacity to around 5,000 vehicle units in September 2020. On the negative side, sales of both the ES6 and ES8 SUV models were weaker, due to the launch of the new EC6 model in September.
Due to the cannibalization of the various Nio models as well as a slowdown in the dynamics of sales, the Nio share was penalized. The share suffered a loss of more than 10% at the start of trading and was quoted below USD 40 in some cases. In the day, the share price turned around and, at USD 47, was already up 3%. The smartphone manufacturer Xiaomi also slipped into the red by up to 12%. It was triggered by the most extensive share placement by a listed company ever carried out on the Hong Kong stock exchange.
The reason for this sudden move was the strong growth in sales and earnings figures in recent months. Most recently, Xiaomi was able to increase its Company turnover by more than a third compared to the previous year, with the lion's share coming from the sale of smartphones. The operating result also grew disproportionately. Xiaomi benefited from the tightening of US sanctions against its competitor Huawei. However, this situation could change quickly if the new president Biden moves closer to the Middle Kingdom again. For this reason, the capital market quickly raised a total of USD 4 billion in a mixture of stocks and bonds. Even if the shares were issued at the lower end of the price range - a smart move!