By Angela Harmantas
Tesla’s agreement with Pure Energy Minerals Ltd is putting lithium in the spotlight – except there’s a catch. Today on Before the Bell we’re discussing the electric car manufacturer’s innovative move to secure North American raw materials. Also, one analyst is going against the grain and betting heavily on oil prices – why? Here’s what you need to know today:
Electric car manufacturer Tesla is quickly emerging as a major player in the mining sector, at least when it comes to raw materials such as lithium and graphite. Yesterday Tesla signed an agreement in Pure Energy Minerals Ltd., a TSXV-listed junior with a lithium project in Nevada, close to Tesla’s planned site for its battery factory. The interesting element (sorry, no pun intended) of this deal is that Pure Energy’s project is still in its nascent stages – it’s not even close to production yet. The company still has to raise the funds needed to push the project along and decide if it’s economically viable to build a mine, although now with Tesla’s stamp of approval I imagine that shouldn’t be too difficult. Fortune’s article gives us further insight into the deal and what it could mean for Pure Energy going forward, but the market is already showing its approval. Shares of Pure Energy were up nearly 30% on Wednesday before ending unchanged at $0.80.
Could oil prices hit $85 by the end of the year? According to Mike Rothman, founder of Cornerstone Analytics, the idea may not be quite as far-fetched as it seems. Even as Goldman Sachs suggested this week that prices could fall to $20 a barrel, Rothman cites research that you can see in this BNN interview that he thinks forecasts an oil deficit in the coming months. I’ll wait to see if other analysts join his bullish outlook, but if we do start seeing a rise in oil prices, our investing idea today looks at 5 energy stocks to watch in this scenario. Do you think that an $85 oil price is hogwash, or is there some legitimacy to Rothman’s belief? Let us know in the comments.
In other news on Wednesday, former RBC Capital Markets executive Brad Katsuyama’s IEX filed papers to become America’s 12th stock market.The firm, which was the focus of Michael Lewis’s recent book Flash Boys, was originally founded as an anti-high frequency-trading platform by installing a roadblock of sorts in the trading process so that nobody would gain an advantage based on speed alone. I’m not going to go into detail about high-frequency trading here – take a look at this CBC News article for some background – but according to the article, if IEX does become a legitimate stock exchange, it could soon be competing with the major exchanges like NASDAQ to execute trades for clients. Is there room for another stock exchange in a crowded market and, if so, could IEX become a suitable alternative?
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
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