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Guy on Rocks: Uranium — glowing in the dark

US data for July and August wasn’t great for Uncle Jerome, but it’s all bullish news for gold bugs in … Read More
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This article was originally published by Stockhead

‘Guy on Rocks’ is a Stockhead series looking at the significant happenings of the resources market each week. Former geologist and experienced stockbroker Guy Le Page, director and responsible executive at Perth-based financial services provider RM Corporate Finance, shares his high conviction views on the market and his “hot stocks to watch”.


Market Ructions

Gold was up US$18 at one-point before settling at US$1,828/ounce for the week after abysmal non-farm payrolls that came in at 235,000 (consensus 720,000).

Data for July and August however was revised upwards slightly while US unemployment fell from 5.4% (July) to 5.25% (August).

Wage inflation was up 0.60% in August from 0.40% recorded in July.

I wonder what Uncle Jerome is going to do now? Let me guess, print more greenbacks…?  Other economic data out last week was also somewhat tepid with the Institute for Supply Management (ISM) non-manufacturing index returning 61.7% (consensus 61.9%) for August, down from 64.1% in July.

All bullish news for gold bugs in the near term.

The general mood towards commodities however appears to be improving (figure 1) after a northern hemisphere sell-off over 1H 2021. Precious metals (worst performing sector this year) outflows totalled US$10.8 billion (Citi Research, Commodity Flows, 30/8/2021) over CY 2021 (figure 2).

Figure 1: Retail and institutional commodities by sector (Source: Citi Research, Commodity Flows, 30 August 2021).
Figure 2: 2021 Commodity Index, combined cumulative flows (Source: Citi Research, Commodity Flows, 30 August 2021).

Amid the declining GDP outlook in China (or alternatively China wanting to cool the market?) China’s State Reserve Board (SRB) is proposing another third round of strategic reserve sales, including 70kt aluminium, 50kt zinc and 30kt copper in an attempt to curb rising metal prices.

Figure 3: Uranium Price 2007-2021 (Source:

The big mover during the week was uranium which finished at US$37.20/lb (figure 3) with Sprott claiming some of the credit based on the establishment of their uranium trust in July of this year.

One RBC Dominion Securities analyst claimed that “renewed financial interest to invest in physical uranium, aided by the Sprott uranium trust, has recently pushed spot prices higher and is an x factor in our price forecast.”

This gave many of the producers and explorers a lift with Cameco up 18% for the week (and 60% this year) to $21.39 a share.

Australian explorers and developers also got a big lift. The Sprott Physical Uranium Trust invests and holds most of its assets in uranium (U3O8) and aims to create a “liquid and convenient way to own physical uranium,” according to Sprott.

Another commodity making the news this week is hard coking coal which surprisingly moved in the opposite direction to iron ore, which is now off US$63/t (30%) from its mid-July peak.

Australia’s fob price stands at a >3-year high of US$248/t, with the landed China price continuing to set new all-time highs, currently at $421/t and up $112/t (+36%) since mid-July (figure 4).

Figure 4: HCC-China v Australia CFR and FOB price two-year chart (Source: Morgan Stanley Research, Metal & Rock, 30 August 2021).

China’s crude steel production has slowed significantly this year (-8%mom; -7%yoy) with blast furnace hot metal output also down (-4%mom;-7%yoy), which softened iron ore demand in July.

China’s coke production however remained unchanged (0%mom; -3%yoy). However, China’s coke output (+4%yoy in 1H21) lagged increasing steel production (+11%yoy).

Current domestic met coal shortages have been exacerbated by the ongoing import ban of Australian coal and suspended Mongolian imports. Coke inventories at Chinese steel mills are almost at a four-year low.

Yet another coup in West Africa, with Colonel Doumbouya claiming that he was seizing power due to the “financial mismanagement and corruption in Guinea under President Alpha Conde”.

Apparently he is not happy with the roads or the hospitals. As the French didn’t leave so much as a spare tyre behind when they pulled out in 1960 I am not surprised. Doesn’t look like any iron ore is due to move  from the giant Simandou deposit any time soon…


Company News

Figure 5: CZR 12-month share price chart (Source: CMC Markets, 3 September 2021).

It appears that digging up and selling iron ore can be a complex business. CZR Resources (ASX:CZR) (figure 5) saw its chairman David Flanagan, together with three other directors, namely managing director Dr Rob Ramsay and non-executive directors Anna Neuling, Simon Jackson, due to leave the building (effective 10 September 2021) after an alleged disagreement with major shareholder Mark Creasy regarding the development of the Robe Mesa iron ore project (near Pannawonica).

I assume the 11th of September was out of the question for obvious reasons.

My advice to the new board is to dig the dirt up as cheaply as possible, sell it for the highest price possible and always keep a bottle of 2010 Hill of Grace close by in the event of disagreement with the major shareholder.

Anyway, might be a trading opportunity here…

Figure 6: BGL 12-month share price chart (Source: CMC Markets, 3 September 2021).

Bellevue Gold (ASX:BGL) (figure 6) was knocked over in the rush for its $106 million placement at 85 cents as part of its $252 million Bellevue Gold Mine development.

A $200 million facility from Macquarie and $25 million from a share purchase plan will round off the funding. Might have to re-read my honours thesis on this…it may be none of the later operators followed any of my exploration recommendations…

Figure 7: BML 12-month share price chart (Source: CMC Markets, 3 September 2021).

Boab Metals (ASX:BML) (figure 7) has received encouraging intersections from 59 holes as part of its  Phase V drilling program at the Sorby Hills Lead-Silver-Zinc Project (BML: 75%, figure 8) situated in the Kimberley (Western Australia).  Drilling confirmed the presence of potentially economic Stratabound mineralisation including (figure 9, 10).

  • SHMD070: 17m @ 3.39% Pb & 15g/t Ag from 58m.
  • SHMD073: 17m @ 3.02% Pb &13g/t Ag from 75m.

RC drilling has commenced with a view to outlining a JORC Resource at the Beta Deposit and expanding the production profile of the existing Definitive Feasibility Study.

Figure 8: Sorby Hills project and drill locations (Source: BML ASX Announcement, 24 August 2021).
Figure 9: East – West geological cross section across the northernmost area of Omega showing the areas of additional mineralisation intersected. (Source: BML ASX Announcement, 24 August 2021).
Figure 10: East – West geological cross section showing the impact of line extension drilling to the mineralisation in the area of Omega (Source: BML ASX Announcement, 24 August 2021).


New Ideas

Figure 11 CKA 12-month share price chart (Source: CMC Markets, 3 September 2021).

Fossil fuels have hardly been the flavour of the month in recent years however you can’t ignore the tear-away coking coal price. Cokal (ASX:CKA) has a portfolio of metallurgical coal prospects in Kalimantan (Indonesia) including:

  • 60% of the Bumi Barito Mineral (BBM) project located in Central Province, Kalimantan covering 14,980ha;
  • 75% of PT Tambang Benua Alam Raya (TBAR) which owns an exploration tenement covering approximately 18,850ha in Central Province, (Kalimantan) and located adjacent to and southeast of BBM;
  • 60% of the Borneo Bara Prima (BBP) project located in Central Province, Kalimantan covering approximately 13,050ha;
  • 75% of the Anugerah Alam Katingan (AAK) project located in Central Province, Kalimantan covering approximately 5,000ha. AAK is currently on ‘on-hold’ status by the Provincial Police Department pending resolution of its disputed ownership.

The projects are all located adjacent to Indomet’s extensive coking coal tenements and CKA is looking to bring the BBM project (figure 12) online first. According to the company the project contains multiple seams of high-quality metallurgical coal.

The updated 2016 DFS for BBM contemplated a 10-year, 2Mtpa operation with a CAPEX of around $70 million and a life of mine cash cost of US$82/tonne.

Coking coal prices have risen from lows around US$50 to US$179/tonne which could generate margins in excess of between US$75-85/tonne assuming costs haven’t risen significantly.

I haven’t been a big fan of Indonesia (I am a big fan of the St Regis Hotel in Bali however) as a mining jurisdiction however CKA does have the tailwinds of a surgical metallurgical coal price behind it together with key regulatory approvals in place. So while the stock has moved to a market capitalisation of around $170 million, there may be further upside around the corner…

Figure 12 CKA’s BBM Project in Kalimantan (Source: CKA ASX Announcement, 12 August 2021).

Finally, don’t forget our portfolio of ASX listed uranium explorers and developers  — Boss Energy (ASX: BOE), Bannerman Resources (ASX:BMN), Paladin Energy (ASX:PDN), Vimy Resources (ASX:VMY), Alligator Energy (ASX:AGE), Peninsula Energy (ASX:PEN) …and there are a few more) which were highlighted in our “Judgement Day” Guy on Rocks publication on 25th May 2021.


Just so you are all in the loop, the Stockhead fun police censored me last week for being politically incorrect (first time for everything) so I have been placed on four weeks probation. My prospects look dim…


At RM Corporate Finance, Guy Le Page is involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting, and corporate advisory roles.

He was head of research at Morgan Stockbroking Limited (Perth) prior to joining Tolhurst Noall as a Corporate Advisor in July 1998. Prior to entering the stockbroking industry, he spent 10 years as an exploration and mining geologist in Australia, Canada, and the United States. The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.


Stockhead has not provided, endorsed, or otherwise assumed responsibility for any financial product advice contained in this article.

The post Guy on Rocks: Uranium — glowing in the dark appeared first on Stockhead.


OpEx Frontrunners BTFD After Stocks Suffer ‘Good News Is Bad News’ Dump

OpEx Frontrunners BTFD After Stocks Suffer ‘Good News Is Bad News’ Dump

Philly Fed spiked more than expected (despite employment, new orders,…

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OpEx Frontrunners BTFD After Stocks Suffer 'Good News Is Bad News' Dump

Philly Fed spiked more than expected (despite employment, new orders, and 6-month outlook all plunging), retail sales surged more than expected (despite a tumble in motor vehicle sales), and continuing jobless claims fell to a new post-COVID low (despite total number of Americans on the dole rising back above 12 million).

All good news on the face of it - so 'Sell Mortimer Sell' was the message for markets as investors threw a mini-taper-tantrum sending stocks, bonds, gold, and crude lower as the dollar spiked.

As Goldman's Chris Hussey also noted, today may simply be a case of 'sell the news,' ahead of next week's FOMC meeting. The S&P 500 is still up 18.7% ytd, despite the advent of the Delta variant and the ensuing downdraft in GDP growth forecasts for 2021. In other words, going into September, the bar had been set high. And a big driver of strong returns -- ultra-low rates -- is facing a bit of uncertainty ahead of next week's FOMC meeting (where the committee may indicate that it is preparing to announce a cut in QE in November .

Of course while stocks tumbled out of the gate from the cash open, inevitably the dip-buyers could not resist. However, some modest weakness at the close left stocks marginally lower on the day with Nasdaq the small winner...

This probably helped convince them...

As everyone and their pet rabbit dived in to front-run tomorrow's option-expiration ramp (Friday, September 17th is a large Triple Witching expiration which means that many stocks/ETFs/Indicies have large options positions that will be closed at 4pm EST on Friday). Specifically, updated open interest figures now show 35% of SPX, 50% SPY, and 35% of QQQ gamma expiring tomorrow. As you can see below we now have 4465/75 as a “pin point” which a sharp drop in the SG Momentum down to 4400.

What this essentially says is that we can anticipate high volatility on a break of 4465, with 4400 now the major support marker...

The S&P maintained its bounce off the 50DMA again...

Cyclicals decoupled from Defensives but both saw dump'n'pumps today...

Source: Bloomberg

Shorts were squeezed once again...

Source: Bloomberg

The dollar spiked to the key resistance level at the trough of Jay Powell's Jackson Hole Day speech...

Source: Bloomberg

Treasury yields spiked too today, but while the short-end is now higher in yield on the week, the long-end remains down 5bps...

Source: Bloomberg

But once 10Y Yields had tagged the pre-J-Hole speech levels, yield reversed lower...

Source: Bloomberg

Cryptos were mixed today with Bitcoin down very modestly, unable to hold $48,000 for now (ETH managed gains, hovering around $3600)...

Source: Bloomberg

Gold plunged again today, back below $1800...

Potential support for gold stands around $1,682/oz., the 38.2% Fibonacci level from its December 2015 low to 2020 peak.

Oil prices dumped and pumped like everything else to end unchanged, with WTI just below $73...

Finally, this is not normal...

But this is...

Let's just hope The ECB and The Fed are bluffing... or lots of freshly-minted stock-trading gurus will get quite a reckoning.

Tyler Durden Thu, 09/16/2021 - 16:00
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Sibanye (NYSE:SBSW) Buys 50% of Potential Future Largest US Lithium Mine for $490M

Precious metal miner Sibanye-Stillwater (NYSE:SBSW) has bought a 50% stake in the pioneer Ltd. Rhyolite Ridge mine in Nevada. The lithium-boron project…

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Rhyolite Ridge. Source: Fluor

Precious metal miner Sibanye-Stillwater (NYSE:SBSW) has bought a 50% stake in the pioneer Ltd. Rhyolite Ridge mine in Nevada. The lithium-boron project has the potential to become the largest lithium mine in the US, according to Sibanye’s CEO.

This is Sibanyes’ third investment this year, after Eramet acquired a 30% stake in the Cone Lithium mine in Finland and Eramet’s purchase of a nickel processing plant in Normandy. The deal, one of the largest lithium deals in the US, and comes amid growing concerns about more investment as demand for the metal outstrips supply and efforts to combat climate change could be delayed. The companies say they will form a joint venture to develop Rhyolite Ridge lithium mine 355 km north of Las Vegas. 

ioneer will remain the operator of the project, leveraging Sibanye’s (NYSE:SBSW) experience as the world’s largest platinum group metals (PGM) miner to develop the project. Silbanye-Stillwater has agreed to underwrite a strategic placement of new common shares of Ioneer for $70 million, representing 7.1% of the share capital after the placement. 

The miner said it had already begun securing debt financing to finance the remainder of the $850 million project. According to the company, the full funding and necessary permits are expected by the end of next year and the project is expected to start by the end of 2024. This would bring a critical project online at just the right moment with rising prices and a lack of supply converging into some of the most favourable conditions for lithium miners in history.

Sibanye-Stillwater chief executive Neal Froneman, commented: “Rhyolite Ridge is a world-class lithium project and we recognize its strategic value, with the potential to become the largest lithium mine in the US,” 

Perfect Timing

Once operational, the Nevada mine is expected to produce 2,200 tons of lithium hydroxide, which is used in most Tesla batteries and will fuel the electric vehicle boom for other automakers as well. 

Auto giants such a Volkswagen Group, Toyota, Mercedes-Benz, and BMW all have plans to develop their electric vehicle lines further. The need for high-density batteries is one of the critical points of concern for the supply chain, and miners will be a large part of stabilizing supply. 

The deal also includes the rights for ioneer to expand operations at nearby lithium deposits, in which case the company has the option to pay an additional $50 million to secure a 50% interest in the project. The project is at an advanced stage and is the largest and most durable lithium project near Tesla’s Gigafactory in the nearby Port of California. The proximity of the project to the Gigafactory and the battery production facilities housed there is a good setup for simple infrastructure and distribution in the future. 

The proposed mine is intended to boost local lithium supplies to U.S. automakers and battery manufacturers. In June, ioneer signed an agreement to supply lithium carbonate units to South Korean battery manufacturer Ecopro. This is likely to be just the tip of the iceberg for the sector as it is heating up quickly with new deals announced regularly and M&A a pivotal part of many lithium miners’ strategies.


The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

The post Sibanye (NYSE:SBSW) Buys 50% of Potential Future Largest US Lithium Mine for $490M appeared first on MiningFeeds.

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Energy & Critical Metals

Fireside Chat: The Future of SPACs Is Bright Despite Early Chaos

Editor’s Note: This article is part of Joanna Makris’ Fireside Chat series, where she provides retail investors with the scoop on the hottest technologies…

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Editor’s Note: This article is part of Joanna Makris’ Fireside Chat series, where she provides retail investors with the scoop on the hottest technologies and trends from today’s business leaders, industry experts and money managers.

Source: NESPIX /

This week, my Fireside Chat aims to get the lowdown on special-purpose acquisition companies (SPACs). I had a lively conversation with Kris Tuttle, founder of SPACvest, a research service that provides analysis and commentary on the post-SPAC market. Tuttle is a longtime equity investor, having been both a widely recognized technology sell-side analyst and Director of Research at investment banking firms Soundview and Adams Harkness. He is also the founder of IPO Candy, a research service centered on the IPO markets.

In today’s conversation, Tuttle gives a good overview on where we are in the SPAC investing cycle right now and how he evaluates these stocks. He shares with us what’s hot (and what’s not).

Read on to learn about SPAC valuations and management financial guidance shenanigans. Discover why a certain American magazine aimed at men is cool again. And see how cannabis point-of-sale (POS), the cloud-based systems that track inventory and transactions, virtual reality, next-gen ultrasound and more are all the hottest plays in tech.

Also find out why EV charging companies are “glorified extension cords.” And uncover a “sleeper stock” that is trading at a mere $2.

With all of those teasers in mind, let’s dive in to the chat!

How do you feel about SPACs? Are they the new dotcom bubble? Or are they the future for IPOs? 

Kris Tuttle: Well, they were a bit of a dotcom bubble for a while. There were some number of months where you could only describe it as “free money.” Because they are SPACs, they split into warrants and common, and I got involved with them, just as we follow IPOs. And it was just a retail explosion, the SPAC world. You could just buy anything and make money. And things got, as you know, kind of crazy with some of the names…some of the more popular names like Virgin Galactic (NYSE:SPCE) [and] Draft Kings (NASDAQ:DKNG). These were sort of the catalyst names. 

Having said all that … that has kind of ended. And if anything, the pendulum may have swung a little bit too far in the other direction, as just about everything that’s live now is trading at or below cash trust value.

So, I think we’ve kind of come, you know, somewhat full circle. In terms of the future, I think SPACs have proven that they’re another tool in the toolbox for looking at your path as a company. Traditional IPO is still right for the Warby Parkers and these kind of companies, but for some larger, sort of industrial names, SPAC is still kind of an attractive way to potentially do it. And I think, if there’s a bit of hair on your story that may not appeal to retail, sometimes a SPAC is kind of a way to kind of get past that. So I think like M&A, SPAC IPOs are here to stay, but hopefully it’ll be a little bit more of a normal process, without the kind of crazy volatility that we had during that sort of “bubble” phase.

Critics of SPACs talk about these companies as having very loose disclosures, very liberal accounting and limited financials. What are some cautionary elements you use when you look at SPACs and, and how would you caution investors and guide them in this space? 

Yeah. That’s a polite way of saying it. I mean, we’ve worked with companies that have just outright pretended like they never gave guidance … in live Q&A. I’ve worked with CEOs who’ve said, “um, I don’t know what you’re talking about. We never gave guidance.”  And then I would follow up with a question, unfortunately, it’s on Zoom where [I’ll say] “well, I have your slide deck here from February, and this is the guidance you gave.” But of course, they won’t address those questions anymore. 

So it’s … it’s really bad. I mean there are disclosure issues and outright lying in some of these cases. 

So, there’s a few things that you want to do. I mean, first of all, you probably need to do some of your own research on these names. I tend to go towards companies that have existing brands and businesses that I’m familiar with. So, that’s a good first step. I’m also looking at the underwriter. Underwriters aren’t perfect, but a Goldman Sachs (NYSE:GS) or Morgan Stanley (NYSE:MS) is a little more likely to have done the work than, you know … I don’t want to pick on anybody … but there are others out there. 

But even with quality companies, you should not be relying on 2025 projections. That’s ridiculous. Or those that say we’re relatively cheap compared to some group of the highest multiple companies you can find in the market. So, unfortunately, as you pointed at the beginning, this really has kind of become a stock picker’s space. So doing your work, finding the right companies, management teams and, and real businesses, that’s the only way to really protect yourself. 

So, what are some of the metrics that you look at in terms of financials or evaluation? How do you differentiate a good [SPAC] from a bad one? 

Well, it definitely starts with the management team and the product. So, one name that we own a fair bit of is called Weed Maps [WM Technology (NASDAQ:MAPS)]. It’s in the cannabis space. I’m not an avid cannabis investor by any stretch, but it’s clearly a thing. I’ve known the company for a long time. It’s a technology platform, like Square (NYSE: SQ) or Toast … Point-of-Sale (POS) online. I don’t want to go too far … it’s not Shopify (NYSE:SHOP), but if you’re in the cannabis business and you’re dealing with a recreational market, you need all of this compliance and Point-of-Sale software. So they have a real product with a real competitive moat with a really good management team. And that’s the starting point. It’s not the cheapest stock in the world. If anything, it’s priced pretty well. But this is a big potential market. 

So those are the absolute starting points in terms of the names that make it into our model and real money portfolio. 

What are some other names you’re liking right now? 

There’s a company called Matterport (NASDAQ:MTTR), which, if you’re familiar with the next generation of virtual reality…Matterport actually uses the technology to capture the insides of all the buildings and all the rooms and all the mechanicals that go online and they are used to do a whole range of applications. So they’ve got some really leading-edge technology. They’ve been signing contracts with real estate agencies and governments. And it’s kind of one of these, you know, very futuristic companies, but [with] strong technology, strong management, et cetera … We’ve also owned Genius Sports (NYSE:GENI), which is a kind of sports tech, entertainment and betting brand working with most of the big leagues and minor leagues.

You might have seen Sportradar Group AG (NASDAQ:SRAD) go public today, a regular-way IPO that’s another great company in the space

A consumer brand name that people might remember is the old Playboy Group (NASDAQ:PLBY), which … you know, I didn’t love initially, because it was very expensive. They have a brand which is kind of scorned here in the U.S. [But in] other geographies, particularly Asia, it’s still viewed as cool. But they’re really trying to be an e-commerce company. And, you know, I think they have a lot of potential. So those are ones we have owned. 

There’s two new ones that we just started buying that I think are pretty interesting. One is a name you may remember. The company is called Rockley Photonics (NYSE:RKLY), The founder is Andrew Rickman, who started Bookham [Technology] back in the eighties or nineties prior to the big photonics wave. Anyway, these guys have pivoted to produce what they’re calling the “ultimate spectrometer chip.” Basically it’s a vastly more powerful sort of solution than you can get with LEDs to do all kinds of biometric measurements. It can sense everything from blood pressure to alcohol concentration, to glucose, et cetera. They’re working allegedly with the Apple’s (NASDAQ:AAPL) of the world on the next generations of the watch and those sorts of things. It’s a high risk situation and they won’t be commercial for a while, but if it works, I suspect they [will] probably get acquired before they go full commercial …  There’s another interesting sort of tech play … a handheld ultrasound company called Butterfly Network (NYSE:BLFY).

Ultrasound has been held back by these big machines. They’ve got a really powerful hand held device that pairs with your iPhone or Android phone. And it’s opening up a huge market for that kind of price point — new applications, home care, all that kind of stuff. That’s been just sitting around pretty much since de-SPACing, maybe it’s, you know, $12-ish, $13-ish dollars a share. So, those are two pretty new names that we’ve been adding to pretty aggressively.

A lot of companies in the SPAC world are claiming to be technology disruptors in massive addressable markets … claiming hockey stick kind of revenue ramps. And many of them are in the EV space, both on the car side and the infrastructure side. I did want to ask you about Lucid Motors, which is one that’s of tremendous retail interest. And your thoughts on that [stock] as potentially the next “Tesla killer.”  

Well, Lucid (NASDAQ:LCID) has definitely got the best EV story out there. The best management team. The most attractive car. And their vehicle is actually rolling. Now, people are driving it and saying great things about it. So they deserve some credit for that. 

In terms of “the Tesla killer” — it gets a lot of clicks, I’m sure for reporters, but the company is the first to tell you that they’re not a Tesla killer at all. They are going for a tiny — like 0.5% share of the luxury car market. Yes, they’re gonna have multiple models, but, they’re not a Tesla killer whatsoever. 

The question is how well are they going to execute in terms of delivering cars at scale? I think they can sell every car they can ship. The question is, how many can they ship? The current valuation I guess, is around $31 billion, which, you know, still seems high to me given that they haven’t started the commercial ramp yet and half of their projected revenues in 2023 and into 2024 are based on the Gravity — an SUV which we haven’t even seen yet. 

So you know, it’s definitely an interesting company. I’m puzzled by why they’re launching so many models when they probably can sell everything that they can make for the next five years — if it holds up as well at scale, as people are saying from the test drives. 

But it’s ultimately a really niche product. So it’s, it’s gonna be like, you know, more like a Porsche or a Ferrari. Well, maybe that’s a little too high end … but it’s really gonna be a niche positioning in terms of where the company lives and what part of the market they’re gonna get. 

Ultimately, you know, they may get acquired by someone who has a hole in this area, but not a strong brand … like a Kia or a Hyundai (OTCMKTS:HYMTF) or somebody that’s got a robust business, and they’re gonna have their own EVs, but this would get them a different level of cache in the EV space. 

So, not terrible. I’m neither long nor short it … but I [wouldn’t] be inclined to do either [at] current prices.

And talking about kind of head scratching, puzzling valuations, the EV charging space also seems to be characterized by some pretty incredible numbers. I’m very curious about your take on Chargepoint and EVgo and what you think about that space in general. 

I mean, I’ve gone through all the interviews and shows with management, and I have never been able to get excited about the charging space. If you look at it, the low-end chargers are essentially glorified extension cords that they’re selling online for $800 for people to put in their garages. And you know, that’s already very competitive. There are 10 of them, and [soon] there’ll be 20. And they’ll [cost] $100 in a year. 

And at the high end, it’s gonna be very fragmented. I see utilities and other outfits doing most of the high-end DC charger installations. And again, the long-term business model is ultimately a commodity. So I have never, as much as I’ve looked at them, been able to get interested [enough] to do any deeper research or want to own any of them.

So, we talked about what’s overvalued. Do you have any sleeper stocks that no one knows about right now and that you’re looking at that could be interesting?  

Well, you know, there’s one that is a very traditional name that we’ve owned for a while, but I think it’s gonna be a great stock. Part of the reason is it’s kind of a “ho hummer” company called Aersale (NASDAQ:ASLE). I think it’s around $13. Anyway, they’re in the commercial aircraft maintenance and supply business, which obviously got decimated in 2020. But it’s roaring back. They’ve got like 30% EBITDA margins and climbing strong growth. They might earn $1.20 this year with the stock at $13. So it’s kind of a $20 stock in terms of how undervalued it is right now. And if some of their new products take off next year, [it] could be a $30 or $40 stock. But it’s fundamentally cheap at something like 10 times earnings.

There is a very small, what I would describe maybe as a backdoor play in the SPAC world … a company I’ve known for a little while. It’s actually close to where I live here in Kentucky called American Resources Corp. (NASDAQ:AREC). It’s got like a $2-and-some-odd share price on it, but they are building a pretty big business around supplying high-grade coal products to the steel industry. But they’ve also got some processes to get rare earths out of abandoned coal mines, which they plan to supply to the EV market. So it’s a very interesting speculative story. 

But the SPAC angle is that they launched their own SPAC. So they’re the sponsors of a hundred-million-dollar SPAC, which will do a combination at some point, and as the sponsor shareholder AREC will get those shares. And so you’ve kind of got a double value sort of situation in this name, with a good team [and] high insider ownership. So, you know, it’s definitely sort of more counter to the market. But it’s a great little story that I don’t believe anybody covers or writes about.

Your comments and feedback are always welcome. Let’s continue the discussion. Email me at

On the date of publication, Joanna Makris did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joanna Makris is a Market Analyst at A strategic thinker and fundamental public equity investor, Joanna leverages over 20 years of experience on Wall Street covering various segments of the Technology, Media, and Telecom sectors at several global investment banks, including Mizuho Securities and Canaccord Genuity.

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