THOUGHTS ON THE STARS ALIGNING FOR NANO What would happen if the stars ever aligned for Nano? Well here’s the thing. I don’t think “if” is the appropriate word. In fact, I don’t think “when” is even appropriate. I believe a more accurate statement at this point is to say “The Stars ARE Aligning for Nano,’’
Here’s why I’m thinking this:
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I still consider that the market is completely underestimating the power of Worley. Of ALL the developments for Nano, I consider this to be the biggest and most important development of all. Worley chooses to partner with Nano, giving Nano Global exposure and credibility. Worley holds the keys to open doors and build plants. And in a matter of months now, they’ll have a complete package that is Sulphate free, cheaper, and 1/10 the Capex (or 10X the product). This is everything the industry needs. Car manufacturers need to build cheaper EV’s, and the battery is the most expensive component currently, being built on environmentally detrimental old technology. That Nano/Worley have had the time to plan and “set the table” will be a huge bonus to companies around the world looking to build.
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That there has been about a 1 year pause in the EV industry on the plant building spree, works perfectly for Nano. They needed that year to get things together with Worley, otherwise contracts could have passed them by. Now, Nano is going to be right in the Sweet Spot. And even better, there have been a number of plants stopped due to Environmental/Sulphate issues. This will play heavily in Nano’s favour as well. This pause is about to end, and Worley/Nano will be fully ready to benefit.
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Inflation looks to be tamed, and interest rates are falling. These are both BIG considerations for building these megaplants, particularly interest rates. If plants are/were conceived with rock-bottom interest rates as were available a couple of years ago, and then rates jumped dramatically (to tame inflation), it impacts access to money. It’s not surprising plants “paused”. With interest rates now coming down, the pause will change to “let’s go”. Again, the timing is excellent for Nano.
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Personally, I think I underestimated the impact of the Election cycle. It doesn’t matter who you vote for, but companies don’t like the uncertainty that any Election can bring, so again, the pause gets put in. With the Election only a few weeks away now, this “impediment” is about to l be removed. Personally, I hope Harris wins because I think the IRA path is a better path to move forward for EV’s. If Trump gets in, well, he hates China and will tariff them to death. So either way, there is a path forward that will help the North American and European Ev build-outs for all things battery. Again, the timing of this Election is great, (and thankfully, almost done).
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There has been a lot of debate on Fund Selling over the past year. As the entire EV space hit a huge rough patch this year, Funds unloaded. For Nano, this was a much worse scenario, as some funds would have sold only because the price fell below their own covenants, i.e., they had to sell. The effect on Nano was rough. It might only be a small percentage of the overall fund that was sold, but if it’s a large number of shares being sold in an absence of buyers, well, you know how that one goes. I would consider this process as “essentially over”. So what now? Well, the stock I think will prove to be quite dry and in strong hands now. Any weak hands are long gone. (By the way, can you imagine being the sap who sold at .70cents? Took the loss AND missed the gain? Twice the pain. Uggh.)
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D.O.D. funding. This is a BIG win for Nano. Yes the funds are great, but it is the credibility that comes with it for Nano. D.O.D. would have thoroughly vetted Nano and its One Pot system, and for the D.O.D to say essentially that Nano’s product is good, valid, and important, worthy of funding, is extremely positive. Nano, ever the prudent company, could even afford a little well-earned swagger I would think. It’s not their style, but I’m sure they’re very pleased with this development.
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With interest rates falling, and a strong run in large cap stocks, I expect to see a rotation to small cap, with the lower interest rates helping drive that interest. The timing of this rotation is near perfect for Nano to benefit.
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Re-inflating the EV sector interest in the market. EV over the past year was pretty horrible, and not the place to be. This wasn’t a Nano problem. It was a sector problem. Look no further than some EV funds down over 90%. But as is always the case, sectors that were dogs soon turn into stars and money pours into the sector as sentiment changes to now seeing it as “a bargain”. Is this sector rotation important? Absolutely. Look at the devastating impact of the EV sector going out of favour. Well the same thing happens when it comes back in to favour, and the money starts pouring in. I think we’ll be seeing a LOT of this happening, for the clear benefit of the EV sector, soon after the election in the States.
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Anticipation buying is also a real market force. Typically anticipation buying begins 2-6 months in advance. This buying is by the “early adopters” to a sector cycle. I’m seeing what looks to be some of this larger scale buying (and have for about a month now). It’s not a strong factor yet, but to my eyes, it absolutely IS there, which is great to see. This type of buying can also move a stock.
All the above is just off the top of my head. I may have forgotten some things…not sure. But the main thrust here is this. The stars “ARE” aligning, and hugely so, in Nano’s favour. Personally, I’m thrilled, and personally, I think the stock is currently vastly undervalued.