Investing in Graphene "Miracle Material" for ProfitCompanies / Technology Jun 21, 2012 - 07:03 AM GMT
Larry D. Spears writes: Last December, Money Morning technology specialist Michael A. Robinson told you about a radical new material that would soon have a pervasive impact on the U.S. economy - and the entire human race.
Robinson detailed how this new material is so powerful and versatile, it's going to play a key role in new products for the U.S. military, leading tech companies, and medical researchers.
"Stronger than steel and lighter than a feather, this high-tech medium will shape virtually every part of our daily lives by the end of this decade," said Robinson. "The possible uses are almost limitless."
It's called graphene, and it's one of the most versatile elements ever created - useful in a multitude of applications and potentially capable of redefining the world as we know it.
The "Miracle" of Graphene
Specifically, graphene is a two-dimensional structure made from the carbon atoms in graphite - the stuff in pencil leads - but bonded together in honeycomb-like sheets a mere one atom thick.
Imagine a sub-microscopic chicken-wire mesh, but made up of carbon atoms and their connectors rather than metal.
First envisioned back in 1947, graphene didn't become a reality until 2004, when several teams of researchers demonstrated that single layers of carbon atoms could actually be isolated.
Now there's a mad dash to exploit the unique properties of the material, which are impressive:
•Graphene is one of the strongest materials ever created, 200 times stronger than steel and even more durable than diamonds. According to researchers quoted by BBC News, "It would take an elephant balanced on a pencil to break through a sheet of graphene the thickness of Saran Wrap."
•It's highly flexible and can be stretched like rubber without losing its strength.
•It's the thinnest physical material in the world - 3 million sheets of graphene stacked atop one another would be just 1 millimeter thick. It also weighs virtually nothing.
•It conducts both heat and electricity better than copper, and could eventually replace silicon in circuitry, potentially changing the nature of every electronic device in use today. Imagine cell phones the size of a strand of wire or big-screen high-definition televisions no thicker than wall paper - and capable of being rolled up into a one-inch tube and moved anywhere.
•It's incredibly energy efficient and a potentially eco-friendly source of power. MIT researchers recently found they could generate electric current by shining light on graphene, meaning it could be used to revolutionize solar-power collection. A separate study at Northwestern University found graphene could be used to charge lithium-ion batteries - like those used in electric vehicles - 10 times faster and give them 10 times the storage capacity of present models.
It's no wonder then that governments, universities, energy companies and major corporations are pouring huge dollar amounts into graphene research and product development.
For example, Great Britain just dedicated $120 million to further graphene work at the University of Manchester; South Korea has announced $300 million in graphene projects; and the U.S. military is studying potential applications in aircraft, missiles and other high-speed, light-weight equipment.
On the corporate front, an estimated 200 companies - from IBM (NYSE: IBM) and Intel Corp. (Nasdaq: INTC) to international players like Korea's Samsung Corp. and Nokia Corp. (NYSE ADR: NOK) - are working on graphene research and applications.
IBM has already demonstrated a 150 gigahertz (GHz) transistor made of graphene, nearly quadrupling the 40 GHz top speed of the fastest silicon-based device.
Investing in Graphene Stock
By now, you should be chomping at the bit for ways in which to invest in this "miracle material."
As far as retail investors are concerned, currently graphene is a limited market.
First, there's no way to invest in graphene - or the graphite carbon it's made from - as a commodity.
China controls roughly 70% of the market, much as it dominates more than 95% of the world's "rare earths" market, and Beijing is both limiting exports and charging a 20% export duty on graphene. That's one reason its price has more than tripled in the past five years.
For investors who can't wait to get a hold of a graphene stock, the only publicly traded Western alternative would be the Northern Graphite Corp. (CVE: NGC). Its shares are listed on the Canadian Venture Exchange, recent price of $1.71.
NGC mines large-flake graphite from its Bissett Creek site in Northern Ontario, and has used it to successfully produce graphene - which, though larger and slightly heavier, reportedly has higher electrical conductivity, lower resistance and greater transparency than graphene made from Chinese powder or flake graphite.
Given its low price - its 52-week range has been $0.71 to $3.42 - Northern Graphite obviously offers potential, but the company hasn't shown a profit at any time over the past five years and trading volume on the CVE is thin, with notoriously large bid-ask spreads. NGC is ultra-speculative.
As of now, there's no real pure play in graphene research, development or manufacturing, either - but there is something close.
A graphene stock in the manufacturing field is CVD Equipment Corp. (Nasdaq: CVV), recent price $13.12. Partnered with Columbia University's Graphene Labs Inc., CVV manufactures and markets graphene products online via a Website called graphene-supermarket.com.
Unlike NGC, CVD Equipment has shown rising revenue ($30.99 million in 2011) and profits over the past five years, with earnings per share jumping from 11 cents in 2010 to 67 cents in 2011. The company earned 12 cents on revenue of $7.15 million in the first quarter of 2012. Unfortunately, trading volume in CVV shares is also thin - just 71,000 per day - and the stock has already risen from just $3.01 a share in mid-2010, though it is well off its 52-week high of $19.76.
Investing in graphene stock is difficult in that nearly all of the other graphene-related companies are privately held. That includes Michigan-based XG Sciences Inc., one of the largest U.S. graphene suppliers, selling "nanoplatelets" and developing specialized graphene products using them.
However, you can make an indirect investment in XG through POSCO (ADR NYSE: PKX), recent price $82.84, which purchased a 20% share in the company last June.
Obviously, graphene offers remarkable possibilities. It also offers substantial profits for investors, but finding the right vehicle to catch the graphene wave will be a challenge - requiring both patience and close monitoring of companies that may benefit most as the new technologies evolve.
For up-to-date news on how to invest in graphene stock, and other groundbreaking tech developments, be sure to follow Michael A. Robinson's Era of Radical Change newsletter. Here Robinson brings you the latest news that can lead to radical profits. And you can't beat the price; get it free by clicking here.
©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: email@example.com
Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.
Money Morning Archive
© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.