Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

NEL ASA, Saturn Oil & Gas, Varta - who has the highest catch-up potential?

Mario Hose Mario Hose, news.financial
0 Comments| April 6, 2020

{{labelSign}}  Favorites
{{errorMessage}}

The share prices of most companies around the world have been falling since February 2020 and the outbreak of the Corona Pandemic. Whether it's hydrogen, oil or batteries, it's hit everyone. The reasons are very different, but they are nevertheless interrelated. Globalization not only has price advantages, but dependencies on supply chains can lead to painful bottlenecks. The current situation is most obvious in the example of protective clothing, which is mainly produced in China and is also needed there in the country of origin of Covid-19. The rest of the world is now facing supply bottlenecks.


Hedging brings safe income

The Canadian oil producer Saturn Oil & Gas (TSXV: SOIL) was launched around three years ago as the result of a restructuring process and has been a success story ever since. The management has now drilled more than 30 wells in Saskatchewan in the Viking Formation. In the first nine months of 2019, the company produced oil from the sandstone layer with a value of over CAD 13.8 million and generated an EBITDAX of CAD 9.6 million.

According to the latest information, the audited financial statements for 2019 will be published by the end of the month at the latest. Management had hedged 400 barrels per day at a price of CAD 65.00 per barrel until February 2021 before the oil market collapsed.


Oil price rally has potential

In the coming days, the oil market is expected to continue its recovery. There are two main reasons for this: Firstly, nobody in and outside OPEC can afford to produce below USD 50 per barrel in the long term for various reasons and a concerted cutback in production will send a signal. Secondly, the future is being traded on the stock markets, i.e. the period after Covid-19. A global economic recovery and coupled with bailout measures will increase the demand for the black gold again.

Saturn's share was traded at CAD 0.15 in February 2020 and started the weekend at CAD 0.09 on Friday - this corresponds to a market value of around CAD 21 million. About 18 months ago, the market capitalization was still over CAD 60 million. The company recently announced that it intends to grow through acquisitions and to take a front-running role in environmental protection.


Expectations for energy transition decline

The company NEL ASA (FSE: D7G) is one of the beacons of the European hydrogen industry. As a developer and manufacturer of plants for the production and distribution of the energy carrier, the company is an essential part of the hydrogen ecosystem. In connection with the development of an infrastructure for modern mobility and hydrogen as an energy storage medium, the company is considered to have high growth potential worldwide. However, NEL ASA's share price has also declined from over EUR 1.40 to less than EUR 0.88 since February 2020. It is currently uncertain what significance the energy transition in mobility will have in the near future.


Recession poses a threat to sales

The shares of battery expert Varta (FSE: VAR1) have fallen since February 2020 from over EUR 87 to EUR 58.40. The company operates as a supplier for other technology companies and for that reason, a recession with the accompanying decline in demand for technical products is correspondingly negative for sales development. For this company, too, it is currently unclear what influence the future subsidy policy of the countries will have. The priority of the policy is currently focused on securing the economic existence of the general public.


CONFLICT OF INTEREST & RISK NOTE
We would like to point out that Apaton Finance GmbH, the owner of news.financial, as well as partners, authors or employees of Apaton Finance GmbH may hold shares in the aforementioned companies and that there may therefore be a conflict of interest. Further details can be found in our ´Conflict of Interest & Risk Disclosure´.

Tags:

{{labelSign}}  Favorites
{{errorMessage}}

Comments

No comments yet. Be first to comment!

Leave a Comment

You must be logged in to be able to post a comment.

Get the latest news and updates from Stockhouse on social media

Follow STOCKHOUSE Today

Featured Company