I speak with a lot of fund managers on a day to day basis, and am always interested in what they have to say about the stocks they hold. One award-winning manager with a strong, value-driven strategy recently convinced me to take a look at an Australian-listed graphite mining opportunity, and I liked what I saw.
More than half of global graphite demand is now coming from the electric vehicle market. Big auto makers like Tesla and Mercedes are scrambling to secure reliable future supplies of graphite. With dozens of countries now shifting to a resource nationalism policy, big manufacturers are looking for Western (i.e. non-Chinese) sources of graphite for the massive expansion in electric vehicles that is being envisaged.
Historically, there has been little investment into Western graphite resources. Each EV needs at least 50kg of graphite in its battery back for the anodes. While steel has been the traditional consumer of graphite, this sudden new demand is placing a premium on graphite miners in the West, yet in the case of this Australian miner, investors have been seemingly ignorant of this opportunity, and the stock is now looking extremely cheap if you want a quality graphite miner at a bargain price.
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