Cable manufacturers experiencing golden era: these shares fueling warehouse operations
The world's shift toward renewable energies and advanced networks sets the stage for a promising future for cable manufacturers, and current stock prices make them an attractive buy.
Consider the spectacular project off the coast of Norddeich, Germany. Orsted has erected 83 wind turbines, the largest wind farm in the country, with blades stretching 200 meters. Manufactured by Siemens Energy, these giants could generate 913 megawatts, enough to power 900,000 households under ideal conditions. However, missing is the critical link to the mainland power grid, with installation delayed until the end of 2025.
The Danish corporation looks to Italian cable manufacturer Prysmian to deliver the 130-kilometer-long direct current connection that will eventually harness this clean, renewable energy. Notably, Prysmian is also working with the Dutch grid operator Tennet on a new technology promising significant cost savings. Despite these promising venture, grid operators must make substantial investments before reaping any profits.
According to a Mannheim University study, over 19.8 billion euros per year will be needed for grid investments in Germany alone until 2037, and around 5.4 billion euros per year thereafter until 2045. The US also faces similar investment requirements, as President Trump seeks to halt construction of new wind farms.
While this is a golden era for cable manufacturers like Prysmian, the industry's stock prices do not reflect this promising outlook. In fact, after several years of growth, these stocks have plummeted nearly a third in the past six months. For investors, this is a valuable opportunity, as the cable industry remains on an upward trajectory.
But it's not just Prysmian that stands to benefit in the coming years. Several other cable manufacturers, including South Korean leader LS Cable & System, French giant Nexans, Greek company Hellenic Cables, North American powerhouse Southwire, and Japanese innovator Sumitomo Electric, are also well-positioned for growth. To learn more about industry insights and stock tips for these companies, check out the current issue of BÖRSE ONLINE.
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[1] South Korean manufacturer LS Cable & System[2] French manufacturer Nexans[3] Greek manufacturer Hellenic Cables[4] North American manufacturer Southwire[5] Japanese manufacturer Sumitomo Electric[Source: VARIMO Research Report, "Renewable Energy Cable Market"]
- The Riffgrund wind farm off the coast of Norddeich, Germany, boasts 83 wind turbines, produced by Siemens Energy, connecting to the mainland power grid through a delivery by Italian cable manufacturer Prysmian.
- Orsted's 913 megawatt wind farm, with a potential to power 900,000 households, will have its connection installed by the end of 2025.
- As demands for grid investments surge in Germany and the US, opportunities abound for cable manufacturers like Prysmian – along with South Korean leader LS Cable & System, French giant Nexans, Greek company Hellenic Cables, North American powerhouse Southwire, and Japanese innovator Sumitamo Electric – to thrive in the renewable energy sector.
- While these cable manufacturers have promising prospects, their stock prices have witnessed a third decrease in the past six months, offering investors a valuable chance to invest in an upward trending industry.
