My optimistic view of this deep-sea mining company is relatively simple. With the rise of AI, machine learning and so many other trends that rely on electrification, we will need many more batteries. And with the geopolitical environment having changed significantly in recent years, finding companies based in North America is key to the overall energy security discussion that regulators and lawmakers are pursuing.
Looking at the chart above, it’s been a relatively bumpy ride for investors in this name so far. This is why I think this recent dip from its high is worth buying.
Is now the time to add exposure to this sector?
TMC and other North American metals companies have been on the rise lately. Some of this has to do with the general increase in commodity prices. But a big part of this move has to do with what I mentioned earlier: an increasing focus on domestic producers of key minerals used in the production of batteries and other technologies.
With TMC stock having fallen from a recent high of over $10 per share to around $5 per share lately (today’s rise has this stock close to the $6 level), we’ll have to see where TMC ends the year.
But I believe that the long-term trends underlying this sector are likely to continue. As more investors turn to alternative mining methods to get us the crucial minerals we need, this is a company that could see more of a spotlight over time.
How quickly can TMC become profitable?
Considering that TMC is still in a very early stage of development, with early expeditions showing strong results and some licensing activity bolstering the stock price, this is a company still burning a lot of cash.
That said, with more than $100 million in cash on the balance sheet, there is plenty of room for the company to start commercial operations.
I expect some initial losses to occur as TMC ramps up production. But with most of the key components for this company ready to begin deep-sea mining, and given the direction prices are heading for many of the key minerals the company mines, TMC is a stock that I think is being overlooked relative to its overall potential.
Yes, this is an overlooked and speculative growth stock for investors to consider. But it’s a bet I certainly support, given the company’s influence on key growth trends and its positioning in an emerging market.
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