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7 Best Cheap Stocks if You Want to Spruce up Your Portfolio

It’s that time of year again! We are in a brand new year and have our resolutions ready. Whether they’re work-related or not, this will be a great…

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This article was originally published by Investor Place

It’s that time of year again! We are in a brand new year and have our resolutions ready. Whether they’re work-related or not, this will be a great opportunity to get organized for success in 2022. Additionally, if you haven’t done so already, now is the perfect time to update and reevaluate your financial plan. It will help ensure that all of your accumulated assets are well protected. One of the best ways to spruce up your portfolio is by investing in cheap stocks.

The stock market is volatile and if you own a bunch of high-flyers, there’s potential for big losses as well. You may find that it is difficult to stay composed when the market takes a sharp decline. It could be an opportunity for you, though. You can take profits and invest in cheap stocks that can stimulate excellent growth.

It is important to understand your personality as an investor. For example, some people are biased towards stocks that pay healthy dividends; others prefer companies with rapid growth rates because they believe this will yield them greater profits down the road — though there’s no guarantee, of course.

Both growth stocks and value investments can be successful if you take the time to examine your portfolio. It might be worth reevaluating what percentage each style gets to ensure that no single investment dominates all others.

Here are seven cheap stocks for your portfolio that also have excellent operating models:

  • Victoria’s Secret (NYSE:VSCO)
  • Ally Financial (NYSE:ALLY)
  • Nexstar Media Group (NASDAQ:NXST)
  • General Motors (NYSE:GM)
  • Electronic Arts (NASDAQ:EA)
  • Nokia (NYSE:NOK)
  • CBRE Group (NYSE:CBRE)

Cheap Stocks to Buy: Victoria’s Secret (VSCO)

colorful clothes on a white rack with a bright yellow backgroundSource: Africa Studio/shutterstock.com

Victoria’s Secret is a global leader in women’s lingerie and sleepwear. They have their finger on the pulse of what consumers want to buy. They understand trends better than anyone — it just goes to show you don’t need expensive marketing campaigns or celebrity endorsements when people line up for miles outside store doors if your product speaks fashion language as theirs does.

The lingerie and beauty company is a rare, undervalued gem. It reported that top-line sales grew significantly during this period while updating guidance with an even more optimistic future outlook.

The company’s revenues for the three months ending Oct. 30 were $1.441 billion, up from last year’s figure of $1.35 billion. Victoria’s Secret has seen a drop in profits during the past quarter, with net revenues coming to $75 million this year compared to previous years’ total of around 143 million.

However, the markets reacted positively to the earnings report because of the updated guidance. They expect to have a revenue of $6.7 billion to $6.8 billion by the end of this year and it is likely that they will be able to exceed their full fiscal-year 2021 expectations.

Compared to 2020’s sales results, it represents an increase of approximately 25%. Supply chain issues will cost them, though. The company anticipates expenses of $150 million connected with these disruptions.

Ally Financial (ALLY)

ally financial office building stocks to buySource: JHVEPhoto/Shutterstock.com

In 1919, GMAC was first established as a division of General Motors. The original operation involved financing vehicles at dealerships and has continued through years of transformation into what it is now: an innovative digital financial services company that provides leading-edge technology to customers worldwide.

The company operates five business segments: automotive finance operations, insurance operations, mortgage financing service, and products for consumer loans; Dealer Financial Services, which offers credit training to dealerships and financial planning solutions.

The pandemic has dealt a tough hand, but with growing revenues and healthy cash balance, they’re showing their strength. With an attractive valuation for investors looking to capitalize on incoming interest rate hikes, these are all sure signs that Ally could be worth your time.

Ally’s market is highly competitive, but when you compare it with some of its peers in the industry that have a stronger return on equity and assets, for instance, Ally has an advantage. There is an opportunity to buy into rising interest rates with Ally. It trades at a significant discount compared to its peers, making it one of the best cheap stocks out there.

Cheap Stocks to Buy: Nexstar Broadcasting (NXST)

Source: Nexstar Media Group

Nexstar Media Group is a company that owns and operates television stations in the United States. They are currently market leaders, with more than 50% share of all local broadcast media out there today, which could bring them higher advertising dollars if economic activity rebounds as expected due to their leadership position.

Nexstar Broadcasting’s recent non-political advertising revenue comes mainly from local businesses, an important source of income for the company. Selling ad time in these commercials generates a majority (70%) of Nexstar’s total advertising money.

The company’s total revenue gained 3.5% in the quarter, compared with a year ago, and it rose to $1.16 billion during that time frame, thanks mostly due to increased sales from new customers while retaining its old ones. Meanwhile, stronger-than-expected earnings per share numbers topped Wall Street analysts’ expectations. The company reported a 13% increase in distribution revenue. The $120 million political surges from last year’s quarter are excluded; station income grew 10%.

NewsNation, formerly WGN America, is now profitable. It was added to its portfolio as part of the Tribune Media purchase in 2019 and revamped last year. Discussion is now rife that another major acquisition is on the cards — the CW, a broadcast network that came into being after a tie-up between WB and UPN.

The company’s co-owners have rights for many important shows like “Riverdale,” “Walker,” and “Dynasty” that they can give away, giving Nexstar an edge in this growing market and making them one step ahead of other competitors.

Executives are confident that any supply-chain issues will not have a significant impact on our advertising results. COO Tom Carter was bullish about the media conglomerate’s outlook. “It won’t be back to 2019 levels just yet,” he stated, “but we continue to make progress.”

General Motors (GM)

Image of General Motors (GM) logo on corporate building with clear sky in the background.Source: Katherine Welles / Shutterstock.com

America’s auto giant, General Motors, is an institution in the United States and abroad. On Sept. 3, 1893, William Durant founded it to produce cars for sale at his company “Buick Motor Company.” For much of the 20th century, the world’s largest automaker was General Motors. At its peak in 2007-2008, the company had a 50% market share within America — but even then, there were still many competitors who could take away your business if you weren’t careful enough.
GM owns four core automobile brands: Chevrolet, Buick, GMC, and Cadillac.

In recent years, GM has gone out of vogue. You can blame that on electric car stocks. They have taken the markets by storm, and it doesn’t look like the momentum is slowing. Tesla (NASDAQ:TSLA) is the world’s favorite electric vehicle (EV) brand, with many customers switching to this company from other brands. Other major companies in the space include Nio (NYSE:NIO), XPeng (NYSE:XPEV), and Li Auto (NASDAQ:LI).

GM is not resting on her haunches, though. It is looking to launch at least 30 EVs by 2025. GM expects its revenue from electric vehicles to reach about $90 billion annually by 2030. This increase is due largely to the company’s new models set for release over this period.

GM looks like a great stock for your portfolio, considering its rich history, strong fundamentals, and excellent outlook. GM stock is practically a steal at just 9.9 times forward price-to-earnings.

Cheap Stocks to Buy: Electronic Arts (EA)

Electronic Arts (EA) logo on a wallSource: Rick Neves / Shutterstock.com

Electronic Arts, the world-renowned video game producer, and publisher are known for its successful line of sports games. It is one of the biggest gaming companies in America and Europe. Games developed and published by Electronic Arts include popular franchises such as Battlefield, Need for Speed, or The Sims. They also publish games under the EA Sports titles like FIFA, NBA Live, and EA Sports UFC.

During the pandemic, with little to do, people pivoted towards playing video games. Against this backdrop, EA was bound to do well. Throughout this period, earnings remained strong. However, now that things are back to normal, investors fear Electronic Arts’ short-term future. Recent ticket sales for blockbusters like ‘Spider-Man: No Way Home‘ and the latest James Bond outing ‘No Time To Die‘ alongside the massive bookings we see in the cruise line industry indicate that pent-up demand for the in-person experience is high.

However, these are all external factors. On the company front, EA is doing well. In November, the video game company reported its third-quarter FY22 results, which surpassed analyst estimates. Net bookings for the quarter accelerated to more than twice last year’s figure of around $910 million. The company’s bottom-line was $1.58 per share, which is an increase from last year’s quarter when they reported only five cents per share earnings.

EA upped its full fiscal year guidance for revenue to be approximately $7.6 billion compared to a prior estimate of $7.4 billion. Adjusted EPS is expected to be about $6.95, up from $6.40 previously.

While EA stock may see lower levels in the near term, there’s still a lot of growth potential, and we think it will be worth your time to buy when prices dip. Growth in gaming is a secular trend. It will not change anytime soon.

Nokia (NOK)

a backdrop featuring the Nokia (NOK) logo with a mobile phone featuring the Nokia logo on its screen in the foregroundSource: rafapress / Shutterstock.com

The world is going to change drastically due to 5G. It will make our lives much easier by giving us more access at a lower cost across all platforms.

Considering the future of 5G and its applications in every field, investors are flocking to this new space. That leads to astronomical valuations. However, one 5G play is trading at an excellent discount, Nokia. It is still mostly known for losing the mobile phone race to Apple (NASDAQ:AAPL). But in the last few years, it has managed to carve out a niche for itself as a 5G infrastructure company. In its latest iteration, the company is a roaring success. With each passing month, it stitches together new contracts worldwide.

In particular, the frosting of relations between Huawei and the Western world is helping Nokia gain market share. It was getting several contracts in Europe and inked an agreement in Taiwan. Last year was particularly interesting because Nokia won its first contract in China. It’s a hard market to crack, and management deserves credit for clinching the win.

Interestingly, despite all these positives, Nokia is not trading at exceptional price multiples. Last year, it became one of the many meme stocks out there. Still, despite the occasional blip, Nokia is incredibly cheap and one of the best 5G stocks out there.

Cheap Stocks to Buy: CBRE Group (CBRE)

read estate crowdfunding stock imageSource: Shutterstock

CBRE focuses on providing services for real estate investors and occupiers such as capital markets-related activities like property leasing or investment management; it also offers valuation and development expertise to its clients through these various affiliates.

CBRE Group has 2020 revenues of $23 billion with more than $133 billion in assets under management. The company’s diverse portfolio ranges from office buildings to retail properties; they also offer property management services globally for small business owners.

With the world struggling to recover from a pandemic, CBRE reported earnings nearly double what they were last year in their latest quarter. This is an encouraging sign for investors who want their money going towards companies that will be around no matter what happens in this tough economic climate. Revenue increased 20% to approximately $6.8 billion.

Leasing revenue in all three regions reached new heights this quarter, with an especially notable rise across Asia-Pacific. Europe also saw a significant jump up 20% from last year’s levels, while the Middle East and Africa saw leasing grow by 11%. The Americas were still below pre-pandemic levels but still managed to show growth of 4%.

Considering these strong numbers, it’s no wonder that CBRE is one of the best cheap stocks at the moment.

On the publication date, Faizan Farooque 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 InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.

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You Can Afford to Be Patient Before Buying Lucid Stock

If you’re a Lucid Group (NASDAQ:LCID) shareholder, you’re probably feeling pretty good today about LCID stock. And if you’re one of those sitting…

If you’re a Lucid Group (NASDAQ:LCID) shareholder, you’re probably feeling pretty good today about LCID stock. And if you’re one of those sitting in the C-suite, you’re breathing a sigh of relief.

Source: Around the World Photos / Shutterstock.com

Wall Street was keeping a close eye on Jan. 19. That date marked 180 days from the successful blank-check merger with Lucid’s special purpose acquisition company (SPAC) partner, Churchill Capital Corp IV.

Shares had fallen 14% in the week before the lockup expiration date for legacy shareholders and there was some concern that LCID stock could take a tumble as shareholders took profits and trimmed their positions. After all, the first private investment as public equity (PIPE) lockup expiration for LCID occurred on Sept. 1. In the week preceding that event, LCID stock fell 8.6%. Then it fell another 11% on the day.

It was only reasonable to fear that we’d see another drop on Jan. 19. However, thankfully for LCID stock, that didn’t happen.

LCID Stock and the Expiration

Lucid didn’t see a drop on Jan. 19. In fact, LCID stock actually rose on the day of the lockup expiration. And on the subsequent day of trading, Lucid fell by only 3.3%. That’s not bad at all.

Shares are still about 50% over their public debut, but that’s to be expected as LCID stock was caught up in the broader selloff of tech stocks and electric vehicle (EV) companies. When the reverse merger closed, legacy shareholders were holding about 1.19 billion shares, according to a filing submitted to the U.S. Securities and Exchange Commission (SEC). The Saudi Public Investment Fund holds a 62.7% stake in LCID stock.

And it has good reason to hold those shares, according to Wccftech:

“The Saudi PIF […] is a long-term investor and is unlikely to be motivated by short-term moves in Lucid Group shares. Secondly, Lucid Group currently forms a cornerstone of Saudi Arabia’s grand transformation strategy. While the Saudis have been negotiating with a number of automakers to establish manufacturing units at a dedicated hub on the Kingdom’s west coast, only Lucid Group is currently at an advanced stage of doing so.”

Lucid at a Glance

Lucid Group is headed by CEO Peter Rawlinson, who was best known before Lucid as the vehicle engineer for the Tesla (NASDAQ:TSLA) Model S.

The Lucid Air sedan didn’t even come out until Oct. 30, but it has already been named the 2022 Car of the Year by MotorTrend. As of Nov. 15, Lucid said it has already received 17,000 reservations for the high-end EV.

This year, the company plans to produce 20,000 vehicles at its plant in Arizona. The factory has a top capacity of 34,000 vehicles, but an expansion project should allow workers to build 90,000 vehicles per year by the end of 2023. Lucid also has plans to open plants in China and the Middle East.

In the company’s third quarter, Lucid posted a loss of 42 cents per share versus analysts’ expectations of a loss of 25 cents per share. But LCID stock also jumped more than 24% on the day. Investors were impressed with the company’s growth projections.

The Bottom Line on LCID Stock

A few days ago, I suggested that $35 was a good spot to buy Lucid if it dipped following the lockup expiration. I still think that’s good advice. However, it now looks like the end of the lockup period won’t be the catalyst that we need to buy LCID stock at bargain prices.

That’s OK. There should be other opportunities.

Remember, Lucid is going head to head with Tesla, which is a trillion-dollar company and the king of the hill when it comes to EV stocks. Redburn analyst Charles Coldicott notes that, while Lucid is a riskier investment than fellow EV startup Rivian (NASDAQ:RIVN), that’s because it’s seen as more directly competing against Elon Musk’s juggernaut. The analyst set a price target of $39 for LCID stock.

Lucid Group will continue to see some volatility in the weeks and months to come, as would any startup. I’m still going to be watching the $35 price point before I consider making a move.

On the date of publication, Patrick Sanders held a long position in TSLA stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders. As of this writing, he did not hold a position in any of the aforementioned securities.

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Palladium, and Palladium One, at the forefront of new hydrogen economy

2022.01.24
As the world transitions from fossil-fueled “ICEs” to battery-powered electric vehicles, the internal combustion engine is unlikely to be…

2022.01.24

As the world transitions from fossil-fueled “ICEs” to battery-powered electric vehicles, the internal combustion engine is unlikely to be resigned to the scrap heap, just yet. Gasoline vehicles and gas-electric hybrids will gradually displace more-polluting diesels, the former equipped with catalytic converters to filter out pollutants like NoX and particulate matter.

This means growing demand for materials that go into gas-powered autocatalysts, including palladium.

The platinum group metal is set for a supply deficit for the 11th straight year. Driving palladium demand are higher sales of gasoline vs diesel units and ever-increasing pollution control (GHS reduction) regulations.

Palladium use in hybrid vehicles, seen as a bridge between gas-powered cars and pure electrics, is a growing source of demand.

We’ve written much about the need for battery metals and their expected shortages in the drive to electrification and decarbonization, and the transition period when palladium will play an increasingly important role in reducing emissions as countries aim to mitigate the effects of global warming.

The hydrogen economy

However there is another solution to the problem of rising temperatures, that has so far received minimal attention in the mass media, and that is hydrogen.

Although hybrids and all-electrics are the modern vehicles of choice for the time being, some believe that lithium-ion batteries are a stop-gap technology that will eventually be replaced by hydrogen fuel cells.

The upside of hydrogen fuel cells is they produce zero emissions (just heat and water) but the downside is that to make hydrogen requires significant amounts of energy, currently being sourced from highly polluting coal or natural gas. The global production of hydrogen right now amounts to 830 million tons of carbon dioxide per year, equivalent to the CO2 emissions of the UK and Indonesia combined.

The utility of hydrogen as a fuel is also limited due to its low density, making it difficult to store, and its flammability. The relatively small number of hydrogen vehicles versus EVs, and extremely sparse hydrogen filling station infrastructure, has dented hydrogen’s consumer appeal.

According to Green Tech Media, in 2020 there were roughly 7,600 hydrogen fuel-cell cars on US roads compared to more than 326,400 EVs sold in the US in 2019.

For now, hydrogen’s use is mostly restricted to industrial applications.

Due to centralized fueling facilities where far less extensive fuel distribution networks are required, buses and utility vehicles like garbage trucks are good candidates for the incorporation of hydrogen fuel cells into the commercial vehicle market.

Remote power generation is another growing application.  Caterpillar, for example, announced it will start offering Cat generator sets capable of operating on 100% hydrogen including fully renewable green hydrogen. More immediately, the company says it will launch gen-sets that can be configured to operate on natural gas blended with up to 25% hydrogen.

NASA has for years used hydrogen fuel cells to power its systems onboard and to provide drinking water for the crew.

So-called “green hydrogen” would be produced from renewable sources such as wind, solar or nuclear. The process is expensive and requires a large electrolyzer in water to split the element from oxygen.

Countries and companies however are increasingly seizing upon green hydrogen as a way of cutting greenhouse gas emissions particularly from heavy industry. Up until recently green hydrogen has been far more expensive to produce than versions made with fossil fuels, but record-high natural gas prices have driven up the costs of fossil-fueled hydrogen, making the green version more competitive.

It is estimated that green hydrogen could cost less than 1.8 euros per kilogram by 2030, compared to around €6/kg currently. So-called “grey” hydrogen produced from fossil fuels costs about €2/kg.

Europe is often on the leading edge of “green”, and there is no exception when it comes to the hydrogen economy. The European Commission, the governing body of the European Union, in 2020 called for the EU’s renewable hydrogen production to reach 1 million tonnes per year, by 2024, increasing to 5-10Mt/year by 2040. This much capacity would require the installation of 40 gigawatts of electroyzers.

Last November Reuters reported the EU and collaborating countries are likely to surpass a current target to install a combined 80GW of renewable hydrogen electrolyzers by 2030.

“That’s our aim: 40 GW of renewable electrolysers in Europe and 40 GW in Europe’s neighbourhood with export to the EU. I think it’s realistic to say we will probably outperform that by 2030,” said EU climate policy chief Frans Timmermans.

How would a greater penetration of hydrogen fuel cells affect the supply of raw materials required to make them? According to the International Platinum Group Metals Association, developments in the hydrogen sector are a demand signal for platinum, chromium and nickel.

Fuel cells are devices that convert a chemical reaction into electricity with heat and water as by-products. Platinum and ruthenium play a large role in this technology, platinum being the catalyst which converts hydrogen and oxygen to heat, water and electricity. Palladium will likely also play a role in the fuel cell, but it is unknown yet how big.

An article in ‘Materials Today’, via Science Direct, says Palladium is a unique material with a strong affinity to hydrogen owing to both its catalytic and hydrogen absorbing properties. Palladium has the potential to play a major role in virtually every aspect of the envisioned hydrogen economy, including hydrogen purification, storage, detection, and fuel cells.

Palladium (Pd) exhibits a number of exceptional properties which enable its application in a myriad of hydrogen technologies. Palladium has the ability to absorb large volumetric quantities of hydrogen at room temperature and atmospheric pressure, and subsequently forms palladium hydride (PdHx)

The superior dissociative properties of Pd enable it to serve as a catalyst to facilitate hydrogen absorption and desorption in other metal hydrides. Further, its inherent selectivity for hydrogen, fast sorption kinetics, and reversibility of hydride formation allow Pd-based alloy membranes to attain a high hydrogen gas quality at 99.99999 % purity.

According to Seeking Alpha, palladium can also be used as a substitute for carbon-supported platinum as an anode catalyst in electrolysis, and help reduce the use of platinum at the cathode too, in proton exchange membrane fuel cells.

Proton exchange membrane fuel cells are a type of fuel cell being developed mainly for transportation applications, as well as for stationary fuel-cell applications and portable fuel-cell applications.

There is evidence suggesting that using silver to manufacture fuel cells containing palladium, makes the fuel cells more effective.

Research published in the journal ‘Nature Nanotechnology’, showed that by applying an atomic layer of palladium on top of silver particles, a catalyst is created for turning formic acid into hydrogen. An article abstract explains:

“Formic acid (HCOOH) has great potential as an in situ source of hydrogen for fuel cells, because it offers high energy density, is non-toxic and can be safely handled in aqueous solution.”

Further, an Oxford University chemist wrote that he believes these improved catalysts could “enable the production of hydrogen from liquid fuel stored in a disposable or recycled cartridge, creating miniature fuel cells to power everything from mobile phones to laptops.”

Since both palladium and platinum are small markets with annual mine production of about 6 and 7 million ounces, respectively, having Pd in the mix allows for more capacity to install hydrogen transportation solutions. That is, constrained platinum supply limits the ability to deploy fuel cells widely; using palladium therefore doubles the potential.

Companies that can supply raw materials for an expanding hydrogen economy, if the technology moves in that direction, will in AOTH’s opinion, do very well.

Palladium One (TSXV:PDM, OTC:NKORF, FSE:7N11)

Palladium One Mining has been working diligently to advance two projects with mineral deposits applicable to both the battery metals designation familiar to most readers, and future-facing metals like platinum and palladium that will find a market in hydrogen fuel cells.

At Palladium One’s Tyko project in Ontario, its main metals are nickel and copper, while at the LK project in Finland, PDM is exploring for palladium, platinum, nickel, copper and cobalt.

Combined, Tyko and LK offer investors nearly equal exposure to battery metals and precious metals — the latter in the form of platinum and palladium. Note: precious metals here refers to palladium, platinum and gold.

In Finland, host country to Palladium One’s Läntinen Koillismaa (LK) PGE-Cu-Ni property, it is interesting to note that the dispersion of minerals is similarly balanced. Taking a look at the pie chart below, based on the country’s existing mineral reserve estimates, it clearly demonstrates that 53% of recovered metal to concentrate, is precious (palladium, platinum, gold) while 47% tie in directly to the battery metal theme, i.e., cobalt, copper and nickel. 

LK

Months of drilling success at LK have culminated in a much-increased resource endowment, further confirming the project’s potential to host a large bulk-tonnage deposit.

At the Haukiaho zone there are significant base metals, with two-thirds of the zone’s value in nickel and copper.

The latest resource estimate of 1.2 million ounces palladium equivalent (PdEq) grading 1.15 g/t, comprises only 3 km of strike length; 2 km of strike extent, immediately east of the Haukiaho resource estimate, contains two significant IP chargeability anomalies with sufficient historical drilling to potentially be upgraded to inferred resources with modest additional drilling.

The remaining 12 km of the Haukiaho trend has not been drill tested, though widely spaced historical drilling provides a high level of confidence for potential additional nickel-copper resources to be delineated, says Palladium One.

The Kaukua Zone of LK is mostly a palladium-platinum-gold play, however it may surprise readers to learn there are significant base metal values particularly at Haukiaho, where two-thirds of the zone’s value is in nickel and copper compared to the Kaukua Zone where 66% of the value is in palladium and platinum.

Indeed Haukiaho hosts some of the highest nickel grades on the LK project. At 17 km in length, the Haukiaho trend currently represents the largest continuous patch of blue-sky potential.

As announced in a Sept. 7 news release, results from a 2,000m drill program at the Haukiaho Zone significantly increased existing resources by 32.7 million tonnes grading 1.15 g/t PdEq (palladium equivalent), for 1.21 million ounces of contained PdEq.

This resource update essentially doubles the resource endowment of the entire LK project, which now boasts 11 million tonnes of indicated resources grading 1.60 g/t PdEq (600,000 oz PdEq) and 44 million tonnes of inferred resources grading 1.19 g/t PdEq (1.7 million oz PdEq).

The company recently reported its widest intercept to date, in a hole drilled southwest of the area where the 2019 open-pit resource estimate at Kaukua was compiled.

All three holes spread over 220 meters laterally intersected the down-plunge, high-grade ‘Core Zone’, with hole LK21-05 reporting the best grades.

The hole brought up drill core assaying 2.1 grams per tonne (g/t) palladium equivalent (PdEq) over 33.5 meters, within 1.6 g/t PdEq over 121 meters. Individual samples graded up to 16 g/t PdEq over 0.6m.

The Core Zone of the Kaukua open pit has been extended 250 meters to the southwest, and it remains open at depth.

“We have extended the ‘Core Zone’ of the Kaukua Deposit 250 beyond the current conceptual open-pit and hole LK21-105 is among the thickest intercepts to date within the Kaukua Deposit and adds significant tonnage to our existing resource endowment,” said Derrick Weyrauch, Palladium One’s President and CEO, in the Jan. 11 news release.

The company followed that up with the results of in-fill drilling released on Thursday, Jan. 20. As Palladium One was drill testing the area between the Kaukua open pit and the Kaukua South Zone, it encountered a new zone it has dubbed Gap. The Gap Zone is considered to be an important area for future resource definition, seeing as it could connect Kaukua and Kaukua South into a larger open-pit mine.

Assay highlights were:

  • 1.3 g/t PdEq over 21.7 meters, including 2.2 g/t PdEq over 4.4m;
  • 1.3. g/t PdEq over 27.8m, with a higher-grade 1.7 g/t PdEq over 6.3m;
  • 1.4 g/t PdEq over 53.1 meters, including 1.8 g/t PdEq over 17m.

“We have made significant progress infilling the area between the Kaukua Open Pit Resource and Kaukua South. Though Gap Zone mineralization is thinner, it could play a significant role in joining Kaukua and Kaukua South into one larger and more efficient Open Pit mine,” Weyrauch stated, in the Jan. 20 news release.

The company notes the Greater Kaukua area is now divided into three blocks separated by northeast-trending faults — Kaukua Open Pit, Kaukua South and Gap Zone. The first two blocks dip to the south and have core zones with thicknesses over 100m, whereas the Gap Zone dips west and has mineralized thicknesses in the 10 to 20-meter range.

Historic and current drilling in the Kaukua area. Background is Induced Polarization (IP) chargeability.
Cross sections showing holes LK21-112, 113, 114, 117 and LK20-042 in Kaukua South and Gap zones.
3D geological model of the Greater Kaukua Area. All drill holes, historic and those drilled by the company, are shown in black.

These results bolster the company’s belief that it could add a significant amount of open-pit resources to the new NI 43-101 resource estimate expected in the first quarter.

Tyko

Tyko project location map

Palladium One also continues to outline a high-grade nickel-copper system at its Tyko Ni-Cu-PGE project in Ontario, where a second-phase drill program in 2021 and an announced expansion increases the size of the property by over a fifth.

All 13 holes drilled at the Smoke Lake target intersected magmatic sulfides, with widths ranging from 1 to 15 meters. A second-phase, 2,000m drill program started last April, following up on high-grade hits of 9.9% nickel equivalent (Ni­Eq) over 3.8m. A number of high-grade intersections were reported, all near surface.

Excited as Palladium One is about its nickel results, there are also notable copper and nickel occurrences, in particular the RJ and Tyko zones located about 18 km west of Smoke Lake. Drilling in 2015 returned several intercepts over 1% nickel + copper with a high of about 1.5% Ni + Cu.

The 7,000-hectare mafic-ultramafic Bulldozer intrusion, which has seen virtually no geological mapping nor exploration, also has significant historical copper showings.

Conclusion

Recently cashed up from a $4.35 million financing, Palladium One is ready to continue exploring Tyko and LK, building upon its considerable 2021 news flow, including a brand new resource at Kaukua expected within the first quarter.

PDM has already amassed 11 million tonnes of indicated resources at LK, grading 1.60 g/t PdEq (600,000 oz PdEq) and 44 million tonnes of inferred resources grading 1.19 g/t PdEq (1.7 million oz PdEq).

Tyko’s Smoke Lake target continues to advance with the strike of the known mineralization growing to 430 meters. An IP geophysical survey is planned for this winter to continue to chase the mineralization, which includes 5.0% nickel equivalent over 1.4 meters and up to 891 ppm copper and 142 ppm cobalt in soils at the Bulldozer Intrusion. In addition to Smoke Lake, Palladium One believes there are new zones of nickel-copper mineralization yet to be discovered. The project was awarded the 2020 Bernie Schnieders Discovery of the Year by the Northwestern Ontario Prospectors Association.

Between both properties, we see Palladium One and its highly motivated management team as a “complete” energy metals company. To review, Tyko’s main metals are nickel and copper, while at the LK project in Finland, PDM is exploring for palladium, platinum, nickel, copper and cobalt.

All of these metals have a role to play in the new green economy. Even better, their markets are bullish. Nickel prices have risen from about $4 a pound in July 2017, to the current $10.18. On Thursday they rallied to a 10-year high of $24,000 a ton. According to Bloomberg, the nickel market reached its tightest point since 2007 earlier this week, after a plunge in LME stockpiles. Two other factors helping nickel prices are China’s monetary easing, and tensions over Ukraine raising the possibility of disruptions to nickel exports from Russia, a key producer of the base metal.

Spot copper has more than doubled from just over $2/lb in April 2020, to the current $4.52. Palladium, despite having an off year in 2021 due to the global chip shortage which crimped consumption of the metal used in the manufacture of catalytic converters, is back to levels seen last June, after falling as low as $1,786/oz last September. Morgan Stanley said in a December note that a rebound in auto production this year should create upside for palladium; the bank sees palladium prices this year averaging $2,100/oz. 

Copper is a crucial component of electrical vehicle motors, wiring and charging stations. Nickel and cobalt are used in the most popular lithium-ion battery chemistry for electric vehicles, NMC batteries. But electric vehicles won’t replace fossil-fueled powered ones quickly. Gasoline-run cars and trucks with their palladium-containing autocatalysts are needed as a bridge technology, to replace diesels, and will be demanded for many years to come, stoking demand for palladium and challenging miners to supply enough of the mineral.

Hybrids are another, more advanced bridge technology. Despite the increased penetration of EVs, hybrids are projected to outpace electric cars for years. They require a greater concentration of precious metals (platinum, palladium, rhodium) than those found on gasoline-only cars. 

Platinum and palladium will become increasingly important in hydrogen fuel cell technology, platinum being the catalyst that converts hydrogen and oxygen to electricity. Palladium’s ability to absorb large quantities of hydrogen means it has future applications in almost every aspect of the hydrogen economy, including hydrogen purification, storage, detection, and fuel cells. Palladium can also be employed as a substitute for platinum in fuel cell catalysts and in proton exchange membrane fuel cells used in transportation applications.

Palladium One’s updated resource estimate at Kaukua, expected this quarter, should provide a stock price catalyst going forward, as the company continues field work at its properties containing a potent mix of energy and precious metals.

Palladium One Mining
TSXV:PDM, OTC:NKORF, FSE:7N11
Cdn$0.24, 2022.01.20
Shares Outstanding 248m
Market cap Cdn$62.7m
PDM website

Richard (Rick) Mills
aheadoftheherd.com
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Author: Gail Mills

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Energy & Critical Metals

QuantumScape Isn’t Just an EV Battery Play Anymore

In late 2020, solid-state electric-vehicle (EV) battery maker QuantumScape (NYSE:QS) was a darling of the markets. As practically every EV-related stock…

In late 2020, solid-state electric-vehicle (EV) battery maker QuantumScape (NYSE:QS) was a darling of the markets. As practically every EV-related stock shot to the moon, QS stock holders booked multi-bagger gains on their well-timed investment.

Source: Michael Vi/Shutterstock.com

That was then, however, and this is now. The time of EV-market euphoria appears to be in the rear-view mirror, and viable businesses in 2022 must expand their horizons or be left behind.

So, is QuantumScape prepared to address rapidly changing market conditions? The price action of QS stock says no, but recent company-specific developments may suggest otherwise.

This presents a rare opportunity, as the share price is low even while QuantumScape’s ambitions run high. Before you charge up your portfolio and buy the stock, though, let’s indulge in some brief but crucial technical analysis.

A Closer Look at QS Stock

In mid-December of last year, I encouraged people to think about decades, not days, when it comes to QS stock.

At that time, the stock was trading at around $23 after already having declined from a peak of more than $130. Recently, the QuantumScape share price has declined even more.

Therefore, I still encourage loyal investors to think about the long-term prospects rather than obsess over month-to-month price moves.

Still, it’s worth noting that QS stock broke below the $20 level. The point here isn’t to scare anybody away, but only to draw attention to what may be a prime buying opportunity.

$20 was a support level throughout much of 2021. It might provide some resistance in 2022, so keep your eye on that price point and watch for a breakout, if it happens.

Positive Developments

It’s interesting to witness QS stock falling to new short-term lows, even while the company seems to be doing relatively well.

For example, consider QuantumScape’s financials. During the nine months that ended on Sept. 30, 2020, the company incurred a net earnings loss of $405,178,000.

Now, let’s fast-forward to the nine months that ended on Sept. 30, 2021. In that period, QuantumScape swung from the aforementioned staggering loss, to a net profit of $21,250,000.

It feels as if Wall Street isn’t giving QuantumScape credit for that achievement. Furthermore, in a Form 8-K filing, the company made a disclosure that’s mysterious but also encouraging.

Apparently, QuantumScape “signed an agreement with an
established global luxury automotive original equipment manufacturer.”

Together, the two businesses hope to “collaborate on the validation and testing of Company’s solid-state battery cells with the goal of providing such cells to the OEM [original equipment manufacturer] for inclusion into pre-production prototype vehicles and ultimately supplying commercial versions of the cells for the OEM’s serial production vehicles.”

Expanding the Scope

Potentially collaborating with a global luxury automaker is certainly a major news item for QuantumScape. Yet, there may be something even more eventful on the horizon.

In a fresh press release, QuantumScape revealed a multi-year agreement with Fluence Energy (NASDAQ:FLNC) to introduce solid-state lithium-metal battery technology to stationary energy storage applications.

This represents more than just a collaboration with Fluence Energy. Really, it’s a major expansion of QuantumScape’s business scope.

It’s also a chance for QuantumScape to address a rapidly growing market. As the press release points out, stationary energy storage installations are expected to increase by over 2,000% from 2020 to 2030. Moreover, this represents a $385 billion global market opportunity.

In other words, as another author concisely summed it up, QuantumScape is moving beyond electric vehicles. This is a significant move for the company, and possibly for the clean-energy industry in general.

The Bottom Line

Applying QuantumScape’s technology to stationary clean-energy systems could be the catalyst needed to push QS stock higher.

Or, it could be an unmitigated disaster. Only time will tell, really.

Still, it’s encouraging to see QuantumScape extend the scope of its business interests. Hopefully, the result will be a brighter and more sustainable future for the company and its shareholders.

On the date of publication, David Moadel 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 InvestorPlace.com Publishing Guidelines.

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energy storage

Author: David Moadel

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