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Buy These 3 Stocks to Benefit From Accelerating EV Adoption, Say Analysts

Electric vehicles have been with us since the dawn of automobiles; several early models a century ago were electrically powered. But the technology involved…

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This article was originally published by TipRanks

Electric vehicles have been with us since the dawn of automobiles; several early models a century ago were electrically powered. But the technology involved – in power generation, in batteries, in electric drive motors and power trains, in chassis and body design and materials – is coming into its own now. Today’s electric cars share the same styling as gasoline vehicles, can match or exceed legacy vehicles’ performance, and are rapidly gaining in reliability and battery charge range.

The explosion of electric vehicles has brought us an array of new companies taking advantage of the many openings offered by changes in the auto industry. It’s not just building the E-cars; it’s also building out the charging networks, developing new batteries, disposing of old batteries, maintaining the cars, training mechanics in the new systems – new companies are sprouting up to fill these, and many more, niches.

So where should a savvy investor start looking? We’ve used the TipRanks platform to pull details on three stocks tied to the emerging electric vehicle industry in a variety of ways. These are Buy-rated equities, with considerable upside potential – and recent thumbs up from Wall Street analysts.

Li-Cycle Holdings (LICY)

We’ll start with batteries. Specifically, with battery recycling. Li-Cycle is a new company, founded just 5 years ago in 2016 to take advantage of the market for recycled battery materials. Li-Cycle is well positioned to benefit from the shift to electrification and demand for battery materials as its lithium-ion battery recycling solution provides an outlet for spent batteries and a sustainable source for materials to be used in recycled batteries.

Li-Cycle estimates that the industry will produce over 15 million tons of discarded lithium-ion batteries by 2030, and is positioning itself to manage the collection and processing of this waste, to the aim of recovering the usable materials. According to the company, up to 95% of the battery materials can processed for recovery, reducing the amounts of waste in landfills.

Earlier this month, Li-Cycle announced that it will be opening a new battery recovery facility in Alabama, substantially increasing the company’s footprint. The Alabama facility, to be located in Tuscaloosa and aimed for a mid-2022 opening, will open with a capacity of 5,000 metric tons of battery manufacturing scrap and potential to double that down the line.

This company is new to the public markets, having gone public on August 11 through a SPAC transaction. That business combination, with Peridot Acquisition Corporation, included $580 million new capital for Li-Cycle, which is being used to fund the company’s facility expansion.

Since going  public, Li-Cycle has also released its first quarterly report as a public entity, for the fiscal third quarter of 2021, which ended on July 31. LICY reported $1.7 million in revenues for its fiscal Q3, up some 840% year-over-year. The magnitude of the gain reflects the fact that this past year the company commenced operations in materials recycling.

Wedbush’s 5-star analyst Daniel Ives see Li-Cycle as a “green EV recycling pure play,” and rates it a Buy along with a $14 price target. At current levels, this target suggests ~37% upside for the year ahead. (To watch Ives’ track record, click here)

Backing this stance, Ives writes: “The EV revolution is in the early innings of playing out, and as more and more EVs hit the road over the decade, companies will turn to Li-Cycle, which is the pure-play lithium-ion recycler in the market, as the source for battery-grade materials. So as demand for lithium, nickel, and cobalt continues to rise, Li-Cycle will have the supply to fulfill growing customer needs. We believe that the lithium-ion recycler is in a good position to double its gross margins by 2025,” Ives opined.

Overall, Wall Street appears to agree with the Wedbush assessment. There are 6 reviews on file for Li-Cycle, and they include 5 to Buy against just 1 to Hold. The stock is selling for $10.20 and its $13.83 average price target implies an upside of ~36% in the next 12 months. (See LICY stock analysis on TipRanks)

Lightning eMotors (ZEV)

Next up, Lightning eMotors, is a company working both sides of the EV equation at once – the vehicle side, and the charging station side. But this is a company that takes ‘thinking out of the box’ as an axiom, and it doesn’t do EVs the same way as everyone else. Rather, Lightning produces electric vehicles for fleet use, in the medium- and heavy-duty truck niches, along with shuttle buses, vans, chassis cabs, and urban transit buses. The company manages this by producing electric drive systems and powertrains, which are then mated to existing gasoline vehicle chassis such as the Ford Transit 350HD, Ford E-450 buses, Ford F-550 cargo trucks, the Chevy 6500XD Low Cab Forward, and various transit buses in the 30-foot to 40-foot sizes.

On the charging station side, Lightning’s charging station division produces EV charging points, and provides the installation, support, and ongoing maintenance needed to keep them in operation. The company has pioneered a Charing as a Service (CaaS) business model, based on customer subscriptions.

Like LICY above, this stock entered the public markets through a SPAC agreement earlier this year. The transaction was completed in May, with GigCapital3, and the ZEV ticker debuted on May 7. The company gained $216.8 million in net capital proceeds from the SPAC transaction

In August of this year, Lightning reported its second quarterly results since the SPAC completed. The report, for 2Q21, showed $5.9 million in revenue, up significantly from the $900,000 recorded in the year-ago quarter. Lightning reported the sale of 37 ‘zero emission’ powertrain systems in Q2, a 300% year-over-year increase.

Looking forward, Lightning has a substantial order backlog, valued at more than 500% of the year-ago quarter’s orders. The backlog includes powertrain system conversions, powertrains for sale directly to customers, and approximately 1,600 charging system units. The increase in the backlog reflects customer demand for Lightning’s products and services.

Looking at Lightning, D.A. Davidson analyst Michael Shlisky believes that the company’s success in delivering is sustainable.

“ZEV is one of the few EV companies delivering on a real, binding backlog today, and is booked well into 2022. While some investors may not like the idea of using an existing ICE vehicle as a starting point for an EV, the truth is that fleets like the silhouettes they are used to, and like the serviceability of the balance-of-truck at major, name-brand dealerships. We would remind them that the cash is just as green. ZEV is also electrifying niche categories that others are not likely to touch. Net/net, we believe there is a lot to like here,” Shlisky wrote.

Based on the above, Shlisky rates ZEV a Buy, and his $17 price target indicates room for ~86% upside potential for the year ahead. (To watch Shlisky’s track record, click here)

Overall, the 6 recent analyst reviews on this stock break down to 5 Buys against a single Sell, for a Moderate Buy consensus rating. The shares have an average price target of $13.20, which implies an upside potential of ~45% from the current share price of $9.12. (See ZEV stock analysis on TipRanks)

GreenPower Motor (GP)

Last but not least is GreenPower Motor, a specialist in electric commercial vehicles, particularly transit buses. GreenPower main product line includes buses for transit systems and school districts, a niche well-suited to the EV concept as these vehicles tend to keep to short- and moderate-range routes within easy reach of their depots and charging stations. In addition, the company also produces the EV Star medium-duty truck cabs and chassis, a module which can be customized to fit a variety of trailer and van bodies fit for a range of purposes.

At the end of August, GreenPower released its BEAST, a purpose built, Type D, all-electric zero-emission school bus. The vehicle was showcased at the Advanced Clean Transportation Expo in Long Beach, California. Following up, the Vancouver-based company announced two weeks later it had delivered its first BEAST school bus, to the Santa Maria Joint Union High School District. The school district operates a fleet of over 30 buses, opening potential for additional sales.

GreenPower’s fiscal 1Q22 ended on June 30, and the company reported the results in August. The report showed $2.7 million at the top line, up 17% year-over-year. Highlights of the quarter included deliver of 21 EV Star vans to customers on the West Coast of the US and Canada.

Among the bulls is 5-star analyst Tate Sullivan from Maxim, who puts a Buy rating on this stock, and sets a $30 price target that implies a robust 12-month upside of 120%. (To watch Sullivan’s track record, click here)

Backing his view, Sullivan notes that GreenPower has a significant inventory holding, allowing the company to fill orders faster than competitors.

“We believe GP’s higher inventory of $18.8M as of 6/30/21 versus F2Q22 revenue (June 2021) revenue of $2.7M suggests GP can deliver future client orders faster and will be less susceptible to potential supply chain disruptions. Commercial customers for EVs may continue to sporadically finalize orders, and having available vehicles to deliver immediately can be a form of a competitive advantage for GP, in our view…. GP’s ‘finished goods’ inventory increased 159% q/q compared to a 25% q/q increase in ‘work in process’ inventory,” Sullivan noted.

All in all, this stock has a unanimous Strong Buy analyst consensus rating, based on 3 positive reviews set in recent weeks. The shares are trading for $13.80 and the average price target is $30.67, indicating a high 122% upside in the coming year. (See GP stock analysis on TipRanks)

To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Buy These 3 Stocks to Benefit From Accelerating EV Adoption, Say Analysts appeared first on TipRanks Financial Blog.




Author: Michael Marcus

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Energy & Critical Metals

Uranium Royalty Corp Expands Physical Uranium Holdings to 1,048,068 Pounds of U3O8

Uranium Royalty Corp Expands Physical Uranium Holdings to 1,048,068 Pounds of U3O8 at a Weighted Average Cost of US$37.64 per pound U3O8

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Uranium Royalty Corp Expands Physical Uranium Holdings to 1,048,068 Pounds of U3O8 at a Weighted Average Cost of US$37.64 per pound U3O8

Canada NewsWire

VANCOUVER, BC, Oct. 19, 2021 /CNW/ – [nxtlink id="269617"]Uranium Royalty Corp.[/nxtlink] (NASDAQ: UROY) ([nxtlink id="269617"]TSXV: URC[/nxtlink]) (“URC” or the “Company“) announces that it is entering into contracts for an additional four spot purchases totaling 400,000 pounds of U3O8 at an average cost of US$45.00 per pound U3O8. Deliveries will be accomplished in October-December 2021 through book transfers to URC’s storage account at [nxtlink id="268558"]Cameco Corporation[/nxtlink]‘s Fuel Services facilities in Ontario, Canada.

As a result, URC will hold a physical inventory of 1,048,068 pounds U3O8 in the Cameco storage account at a weighted average cost of US$37.64 per pound. The latest Trade Tech daily spot price is at US$47.25 per pound as of October 18, 2021, leading to an increase in the net realizable value of URC’s physical uranium holdings to US$10.07 million.

It is within URC’s mandate to make periodic purchases of physical uranium to provide attractive commodity price exposure to shareholders, especially in these early stages of a bull market in uranium. The global mega-trend towards de-carbonization is providing a major catalyst for carbon-free, safe, and reliable nuclear energy, and market fundamentals are rapidly rebalancing with continued under-investment in new mine capacity and drawdown of excess inventories.

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated August 18, 2021 to its short form base shelf prospectus dated June 16, 2021.

About [nxtlink id="269617"]Uranium Royalty Corp.[/nxtlink]

[nxtlink id="269617"]Uranium Royalty Corp.[/nxtlink] (URC) is the world’s only uranium-focused royalty and streaming company and the only pure-play uranium listed company on the Nasdaq.  URC provides investors with uranium commodity price exposure through strategic acquisitions in uranium interests, including royalties, streams, debt and equity in uranium companies, as well as through holdings of physical uranium. The Company is well positioned as a capital provider to an industry needing massive investments in global productive capacity to meet the growing need for uranium as fuel for carbon-free nuclear energy.  URC has deep industry knowledge and expertise to identify and evaluate investment opportunities in the uranium industry. The Company’s management and the Board include individuals with decades of combined experience in the uranium and nuclear energy sectors, including specific expertise in mine finance, project identification and evaluation, mine development and uranium sales and trading.

Forward Looking Information

Certain statements in this news release may constitute “forward-looking information”, including those regarding the Company’s expectations regarding uranium markets. Forward-looking information includes statements that address or discuss activities, events or developments that the Company expects or anticipates may occur in the future. When used in this news release, words such as “estimates”, “expects”, “plans”, “anticipates”, “will”, “believes”, “intends” “should”, “could”, “may” and other similar terminology are intended to identify such forward-looking information. Statements constituting forward-looking information reflect the current expectations and beliefs of the Company’s management. These statements involve significant uncertainties, known and unknown risks, uncertainties and other factors and, therefore, actual results, performance or achievements of the Company and its industry may be materially different from those implied by such forward-looking statements. They should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from such forward-looking information, including, without limitation, risks inherent to royalty companies, uranium price volatility, risks related to the operators of the projects underlying the Company’s existing and proposed interests and those other risks described in filings with Canadian securities regulators and the U.S. Securities and Exchange Commission. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking information and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.

Neither the TSX Venture Exchange (the “TSX-V”) nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

View original content:https://www.prnewswire.com/news-releases/uranium-royalty-corp-expands-physical-uranium-holdings-to-1-048-068-pounds-of-u3o8-at-a-weighted-average-cost-of-us37-64-per-pound-u3o8–301402822.html

SOURCE [nxtlink id="269617"]Uranium Royalty Corp.[/nxtlink]

[nxtlink id="268558"]cameco corporation[/nxtlink]

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Hyliion’s Unique Bet on the Future of Trucking

Hyliion (NYSE:HYLN) is one of the flood of electric vehicle (EV) SPACs that emerged over the past year. HYLN stock, like its peer group, has also had a…

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Hyliion (NYSE:HYLN) is one of the flood of electric vehicle (EV) SPACs that emerged over the past year. HYLN stock, like its peer group, has also had a rough run in 2021 after the initial price spike.

Source: Muratart/Shutterstock.com

Unlike most of the EV companies, however, Hyliion has a unique vision. Rather than aiming to build its own EV brand from the ground-up, Hyliion is working on niche solutions to enhance the already-existing trucking industry. It aims for incremental improvement rather than reinventing the wheel.

So, will Hyliion’s new approach find commercial success?

Hyliion’s Products

Currently, Hyliion is working on a few different items to improve trucking efficiency. The company makes powertrains, which can be added to trucks. These are intended to capture power as a vehicle rolls downhill. That retained power charges a battery, which can help assist the vehicle once it needs energy again. However, the high $25,000 sticker price for HYLN’s product counteracts the fuel savings; so far, demand has been limited.

Hyliion is also working on battery packs. However this is a competitive field where it may not have a significant advantage.

The firm’s most promising item is the Hypertruck ERX. This is a unique product. It offers a truck a dual-powered system that runs on both a battery and a natural gas engine. For shorter-trips, it goes purely off the electric battery, offering clean emission-free driving. It has built-in features such as regenerative braking to help conserve and maximize power from the existing battery as well.

Once the vehicle goes beyond its range, however, it switches to using the on-board natural gas engine. Natural gas is much cleaner than diesel. Historically, it’s also been much cheaper, though that’s currently under question given the ferocious rally in natural gas prices over the past few months. Regardless, historically, there’s been a considerable amount of interest in using natural gas for trucking.

A combination natural gas/battery engine could be a best-of-both-worlds solution. It offers many of the efficiency and environmental benefits of electric, while having a much larger range thanks to the natural gas backup. Additionally, it gives trucking companies a relatively simple way to improve their business and improve their environmental profile without having to totally overhaul their whole fleet.

Is There Demand for This Solution?

There’s a bearish talking point on HYLN stock is worth considering. Simply put, there are dozens if not hundreds of companies in the EV space, with many of them focusing on trucking in particular. Yet Hyliion is the only one—or at least the only public one—pursuing this sort of hybrid approach.

Thus, one can reasonably suggest that Hyliion’s solution simply isn’t that promising . The existing trucking industry has operated as it has for decades. It may take a total rethinking of trucking from the ground up to disrupt the existing supply chain. Even if Hyliion can produce incrementally better results, that may not be enough to move the needle.

More broadly, there is a dilemma so many SPAC firms find themselves in. They have little in the way of profits or even recurring revenues yet. So, investors have to believe in the story to maintain their confidence in the firm. That certainly applies to HYLN stock, which has generated minimal revenues up to this point. The company does have a decent balance sheet and a number of pre-orders. Still, it will take more time to see if Hyliion can convert its potential into tangible results.

HYLN Stock Verdict

Hyliion is doing something different. You can argue that either way. Bears say no one else is pursuing this path because it is unlikely to garner much commercial interest. And that’s a fair argument.

On the other hand, there are way too many generic EV companies with a spiffy-looking prototype vehicle and little else. You might have better odds taking a chance on a company that is trying to advance a practical—albeit less flashy—solution to a widespread problem.

Hyliion lacks a lot of glamour you’d find in other EV companies. Relying partly on natural gas fails to check certain environmental, social and governance (ESG) boxes as well. However, if the company can deliver on its promises in terms of efficiency and cost savings, that other stuff shouldn’t matter too much. Hyliion still has to prove out that potential commercial demand. But the concept makes a lot of sense, and the valuation isn’t too demanding at this price, either.

On the date of publication, Ian Bezek 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.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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Author: Ian Bezek

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Energy & Critical Metals

Cypress Development kickstarts its pilot plant program

 
Cypress Development (CYP.V) has completed the assembly of the pilot plant which will be used to test the metallurgical characteristics of the Clayton…

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Cypress Development (CYP.V) has completed the assembly of the pilot plant which will be used to test the metallurgical characteristics of the Clayton Valley Lithium project in Nevada. The outcome of the pilot plant program will be very important as Cypress will be testing the use of a chloride-based leaching process in combination with the Chemionex-Lionex process for direct lithium extraction.

This approach worked on a smaller scale basis and the pilot plant program could be seen as the moment of the truth. The flow sheet seems to make sense, and could perhaps mean a breakthrough for clay-hosted lithium projects as the sector will for sure be moving towards a ‘cleaner’ approach to recover the lithium versus the classic acid leaching processes. A successful outcome will further de-risk the project, and the subsequent feasibility study may show superior economics if the company uses a slightly higher lithium price compared to the PEA and PFS studies. Keep in mind the current market price for lithium carbonate exceeds $20,000 per tonne and if that price would have been used in the PFS, the NPV of the Clayton Valley project would have been substantially higher.

The pilot plant programme comes very timely as this appears to be the right time to consider developing a lithium project in North America as the economics will for sure be underpinned by a strong lithium price.


Disclosure: The author has a long position in Cypress Development. Cypress is a sponsor of the website. Please read our disclaimer.

Author: CR Team

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