Especially when the material gets mass adopted for commercial use.
Think silicon here — it’s strong, durable, flexible, lightweight and cheap.
Because of those factors, silicon has dominated the computing landscape for years.
Virtually all circuitry is derived from silicon — from iPads to solar panels.
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Yet graphene was supposed to unseat silicon a few years back.
Graphene is stronger than diamond and conducts heat and electricity far more efficiently than any substance on Earth.
So what happened?
If graphene is still the future, now is the perfect time to buy.
Shares of graphene innovators sit at multiyear lows.
So should you be loading up?
Let’s take a peek under the hood.
And understandably so…
Outside of the academic community, practically no one knew what it was until about five years ago.
The shares of companies working to commercialize it soared seemingly overnight — and fell back to Earth just as quickly.
But just like any other “newly discovered” material with the potential to change the world, graphene will take decades to emerge from a laboratory and onto production lines.
Take silicon, for instance…
Silicon was discovered in the early 19th century. But it didn’t find true commercial fame until it was used to build transistors in the 1950s.
It probably won’t take that long for savvy entrepreneurs to put graphene to use. But I’m sure you see my point.
And now that the initial hype has worn off, the handful of companies that are working to commercialize graphene are incredibly cheap.
In other words, if you’re bullish on graphene — like I am — now is your best chance to scoop up these names at a discount.
One such bargain is Graphene NanoChem PLC (OTCBB: GRPEF).
The Kuala Lumpur, Malaysia-based firm designs nanotechnology solutions using graphene, primarily for the oil and gas industries.
This company is flying well under the radar, boasting a market cap of just $3 million.
And according to a report from Allied Market Research, the global graphene market is expected to top $151 million by 2021 — at an eye-popping compound annual rate of 48%.
There’s a lot of market share up for grabs in this high-growth industry and Graphene NanoChem could be your ticket.
Bottom line: Graphene has taken a back seat in the headlines, but the explosive nanomaterial is far from dead. And investors who pull the trigger now stand to make a fortune.
It was discovered and first produced in 2004, with a Nobel Prize for its discovery awarded in 2010.
Graphene combines unique properties — high conductivity and structural strength 200 times that of steel. Yet it can be levitated by neodymium magnets.
However, it is difficult to produce and work with. And commercial applications, such as supercapacitors, develop slowly. Thus, any investment in the sector should be regarded as long term.
That doesn’t mean growth is at a standstill, though.
While total global sales of graphene were only $32 million in 2016, the market is expected to grow at 35% per annum — to reach $194 million by 2022.
The largest player by market capitalization ($33 million) in the graphene space is currently Haydale Graphene Industries PLC (OTCBB: HDGHF). The company is headquartered in Wales with a distribution arm in South Korea, but it’s quoted in London and traded OTC.
Haydale has developed a proprietary, scalable plasma process to produce graphene for a wide variety of applications.
The company offers graphene inks and coatings, like electrically conductive inks for electronic uses, biosensors for medical applications, thermal coatings for heat dissipation and coatings for electrostatic discharge.
It recently entered the Chinese market with a 9.9% investment by Everpower International Holdings Co. Ltd., making the first sales to Everpower in September 2017. Revenue in the first half of the year to June 2017 was up 90%, to 1.5 million pounds.
With its international coverage, especially in China and South Korea, Haydale has a good chance to remain a leading market participant as the graphene industry expands to commercial size.
From that perspective, the graphene growth story remains a blip on the radar, registering less than $50 million in revenue last year.
Here’s the rub… If we wait too long for the trend to materialize, it’ll be too obvious and more importantly, too late.
So although graphene remains a highly promising fundamental investment and ultimately an extremely lucrative one, it remains highly speculative. As such, it makes the most sense to go small to go big.
By that I mean the smart thing to do is to take a small position in some of the early market leaders and continue to uncover and diversify by making small investments in other up-and-comers over time.
By doing so, you’ll wisely be able to spread your bets across a portfolio of companies, thereby greatly increasing your odds of hitting it big once the graphene mega-trend begins in earnest.
The two companies shared by my colleagues are the perfect place to start. So don’t delay!
Ahead of the tape,
Louis Basenese
Chief Investment Strategist, Wall Street Daily
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