Aqua Metals (AQMS, NASDAQ)
$0.97 | Market Cap $72 million | Average Volume 955,000
Aqua Metals is an intriguing beaten-down U.S-listed stock (NASDAQ) with good liquidity and an opportunity to rebound significantly. It would be particularly attractive in the event of further market weakness that takes it to strong support in the 80’s, so watch for that. It closed today at 97 cents.
AquaRefining, their patent protected recycling process, reduces reliance on mining by returning strategic metals back to the supply chain in an environmentally friendly way (no heat, no smelting). That includes Lead, Lithium, Nickel, and Cobalt. For its products, equipment, and process Aqua Metals sees a total addressable market of $10 billion by 2025 and $31 billion by 2030 based on metal recovery rates.
Would you believe 95% of all Lithium-ion batteries today are NOT recycled and end up in a landfill!
What a waste.
And the 5% that are recycled have a harmful impact on people’s health and the environment due to the extremely high heats used in the process. Poor recoveries compound the problem to make smelting an unsustainable method of recycling (no Lithium is even recovered).
According to Aqua Metals‘ CEO Steve Cotton, in the entire world, there’s really no commercial Lithium recycler or recycling going on today. So there’s a great opportunity in front of AQMS.
Compared to its few competitors, Aqua Refining returns metals like Nickel in metal form. From there Aqua Metals can “easily” make Nickel sulphate, a key differentiating factor and important step toward getting Nickel back into new batteries.
Less steps to get the end-product needed for batteries makes (should make) Aqua Refining more economical and superior to any alternative processes.
Aqua Refining uses 1/200th of the chemicals used in hydro recycling processes and recycles chemicals it does use.
They’ve got the option to sell product direct to the battery supply chain or metals industry.
Worth repeating – for all the talk about Lithium (rising prices, rising demand, availability, etc.) today, there is no Lithium recycling being done on a commercial scale. Zero-zip-nada. Aqua Metals is pioneering a process that’s badly needed NOW.
While the stock price is down and trading just below $1, well off a 2021 high of $7, everything I’m hearing sounds quite good. Sure, it will take some time to scale the business but we’re only talking quarters or another year before significant revenues start flowing. Plus, the U.S. Government is extremely motivated to secure Nickel and Lithium supplies at home. There’s a real chance Aqua Metals might find itself on the receiving end of a $50 to $100 million grant from the government which may feel a sense of urgency to get something like Aqua Refining going gangbusters asap.
Senator Catherine Cortez Masto says: “Nevada’s innovation economy is at the forefront of battery manufacturing and recycling, and the infrastructure law could bring vital new investments to the state.”
LiNiCo is a partner of Aqua Metals (they own 12% equity) and this location is the first plant built by AQMS, it’s now being leased-owned by LiNiCo.
Notice the Tesla gigafactory in the background.
I don’t think it’s a long shot, certainly within the realm of possibilities, the names Tesla and Elon Musk could be mentioned in the same line as AquaRefining.
AQMS Long-Term Chart
- Big gap between the current price and the 200-day SMA ($1.46 on this monthly chart)
- Strong support in the mid-to-upper 80’s
- Watch for an explosive move when the stock overcomes its downtrend line from 2021
- Primary trend (ADX indicator) still has a bullish bias despite the big drop from early 2021
- RSI(14) is likely bottoming around 40%
AQMS provides exposure to “green” technology plus battery metals. It’s right in the sweet spot of long-term trends.