Agree with most but I would replace PLS with NVX in your...

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unicrumba

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01/04/22

11:44

Post #: 60575282
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Originally posted by WhatsTheTip: ↑

You forgot the word "yet". It should read "Well this stock isn't yet like LKE, SYA, LTR, AVZ etc that kept moving high."

EGR is exposed to the same battery tailwind as lithium and other battery materials. The big difference is that the lithium supply-demand imbalance has crystalised earlier than the same looming imbalance in spherical graphite. Despite the great outlook for lithium, the market still managed to create a world of shareholder pain for lithium stocks across 2018 and 2019 before turning in 2020 and providing unbelievable growth in 2021.

As shown by the delays, it isn't easy getting a spherical graphite processing plant and this is going to assist a supply imbalance, particularly as western gigafactories come online and want a more robust supply chain.

The first graph below is the largest lithium market cap company listed in the ASX (PLS). A 2018 peak of just over $1 to a mid 2019 price of around 50c. It did fall further than 50c, but that was partly due to Covid and partly due to the over-supply situation created by a lot of Australian hard-rock Spod coming to market before the EV market was ready to take this demand. The moral - even when the future turns out to be great, the market can still trash a stock to what in highsight are silly prices. The same down 40-50% comment around PLS in mid 2019.

The second chart is EGR. A peak of just over $1 and a decline to just over 50c. Now I can't say it will happen, but EGR across 2022 to 2024 could be what PLS was across 2020 to 2022. Where is PLS now after its decline to and below 50c? $3.21

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Agree with most but I would replace PLS with NVX in your example:

...Now I can't say it will happen, but EGR across 2022 to 2024 could be what PLS was across 2020 to 2022...

Reason being, EGR has (will have) much lower debt burden compared to PLS and the LiSector will be able to increase output significantly faster than the GSector
as significantly more money for developing the Li sector has been already spent do date, reason being China still had enough in-country G supply
but not Li.

Last edited by unicrumba: 01/04/22

EGR Price at posting: 57.0¢ Sentiment: Buy Disclosure: Held
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1 Great analysis

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