Like most investors, one of your top goals has been to enjoy financial freedom at whatever age you choose. So, it stands to reason that your money should ideally generate above-market returns with below market risk.
Truth is — if you really want to become a better investor then you need to be looking at where the smart money is heading. You need to understand what is truly driving the markets and how you can take advantage of these moves as – and before – they hit the mainstream.
That’s how the long-term wealth can be found.
In fact, we’ve uncovered seven stocks that should have a place in your portfolio immediately.
Good and Cheap Stock No. 1 – Nio Inc. (NIO)
Long-term, NIO should be in all portfolios.
For its fourth quarter, the company posted a 16-cent loss on sales of $1.6 billion. The Street was looking for that 16-cent loss on sales closer to $1.5 billion. Gross margins were 17.2%, as compared to estimates for 17.6%.
“We concluded the year of 2021 on a strong note with an annual delivery of 91,429 vehicles in total, representing an increase of 109.1% year-over-year, despite all the challenges including the supply chain volatilities in particular,” said CEO William Bin Li.
Going forward, the company expects to deliver 25,000 to 26,000 vehicles in the first quarter, which is less than expectations for 28,000.
While that was slightly disappointing, we have to remember the company has doubled its production capacity to about 20,000 EVs a month. It has new products coming out this year, including the ET7 sedan, and it has plans to expand deeper into Europe. Plus, we can’t forget that electric vehicle demand is only growing.
Good and Cheap Stock No. 2 – Li Auto (LI)
Li Auto is another interesting electric vehicle stock to consider.
In late February, Barclays analyst Jiong Shao raised the firm’s price target on Li Auto to $40 from $38 with an Overweight rating. The company’s Q4 revenue came in better than guided and its vehicle gross margins continue to trend up.
For its fourth quarter, the company reported revenue of $1.63B, which was above expectations for $1.6B. The company delivered 35,221 Li ONEs in the quarter, which was growth of 40.2% quarter over quarter. It was also a year over year increase of about 144%. For the full year, deliveries were up more than 177% to 90,491.
Good and Cheap Stock No. 3 – Lithium Americas (LAC)
Lithium Americas could easily see higher highs.
All thanks to a lithium bull market that shows no signs of slowing – at least not soon. For one, by 2030, 125 million electric vehicles could be on the road. Two, major automakers are starting to abandon internal combustion engines for EVs.
However, for millions of EVs to hit the roads, each will need around 22 pounds of lithium.
Unfortunately, the world is in short supply, with massive demand.
Even the International Energy Agency is warning that the, “The supply of critical minerals crucial for technologies such as wind turbines and electric vehicles will have to be ramped up over the next decades if the planet’s climate targets are to be met.”
That’s a strong catalyst for Lithium Americas. Even better, construction activities at Caucharí-Olaroz remain on track to achieve first production by mid-2022 on the initial 40,000 tonnes per annum operation. At Thacker Pass, results of a Feasibility Study on the first phase of Thacker Pass (for at least 30,000-35,000 tpa of lithium carbonate) are expected by year end.
Good and Cheap Stock No. 4 – Cameco Corporation (CCJ)
Uranium stocks like Cameco are starting to push aggressively higher.
Investors are betting that nuclear power could be a big part of our future, as we move away from fossil fuels. In fact, according to Benzinga, “According to the latest Nuclear Fuel report by the World Nuclear Association, the grand decarbonization goals of the world’s main economies need a great deal of low-carbon nuclear energy.”
Unfortunately, there’s a massive supply-demand issue brewing, which could send uranium prices and related stocks to higher highs.
Fortunately, CCJ may be able to help. “Since 2016, with our planned and unplanned production cuts, inventory reduction and market purchases, we have removed more than 190 million pounds of uranium from the market, which we believe has contributed to the security of supply concerns in our industry,” said Tim Gitzel, Cameco’s president and CEO.
Even better, the company just approved a 50% increase to its annual dividend for 2022.
Good and Cheap Stock No. 5 — Kinder Morgan (KMI)
High dividend stocks like Kinder Morgan are a great way to offset inflation.
After all, Kinder Morgan is one of the largest infrastructure companies in North America. It owns and controls oil and gas pipelines and terminals. With a dividend yield of 6.24%, the company recently said “it was budgeting a 3% dividend boost this year,” according to Barron’s.
The company also continues to be one of the most stable, with enough cash cover its dividend.
Also, much like the rest of the energy sector, it’s starting to pivot toward lower carbon energy sources, which could provide it with solid growth opportunities.
In fact, Kinder Morgan just announced “the receipt of the necessary commercial commitments to move forward with the permitting and construction of a renewable diesel hub in Southern California. Upon completion, the Southern California hub will be the first of its kind in the United States to transport batches of renewable diesel by pipeline with no resulting loss of product to trans mix,” as noted in a company press release.
Good and Cheap Stock No. 6 – Cleveland-Cliffs (CLF)
2022 has been good to CLF so far, as of March 24.
Since bottoming out around $16, the stock shot up to $32.67 – and could see higher highs. For one, there’s been a good deal of insider buying. In February, for example, Director Janet Miller bought 1,255 shares for $24,949. In December, Director Robert Fisher Jr. bought 5,000 shares. CEO and Chairman Lourenco Goncalves bought 50,000 shares in December, as well.
Two, Cleveland-Cliffs is benefiting from sky-high steel prices.
In fact, JPMorgan analyst Michael Glick noted that, “’Russia’s invasion a month ago nearly instantly set off a butterfly effect across the steel markets,’ with the impact only beginning to be felt in North America. When the invasion began, steel exports from Russia and Ukraine almost immediately stopped, while demand in North America is set to grow. That could push steel prices up to $1,500 a ton for 2022,” as noted by Barron’s.
Good and Cheap Stock No. 7 – MP Materials (MP)
Keep an eye on rare earth stocks, like MP Materials (MP).
For one, President Biden announced a series of steps to strengthen key U.S. supply chains, including rare earths. Two, there’s substantial demand for rare earths outside of China.
After all, according to Supply Chain Dive, “Higher amounts of rare earth metals are required in the production of electric vehicles, advanced batteries, wind turbines and other renewable products. An average electric car requires six times the mineral inputs of a conventional car, while an onshore wind plant needs nine times more mineral resources than a gas-fired plant.”
Two, the U.S. Department of Defense just awarded MP Materials a $35 million contract to build a facility that can process heavy rare earths.
Three, insiders have been buying.
On March 11, General Counsel, Elliott Hoops bought 4,000 shares for $176,040. On March 7, Director Randall Weisenburger bought 30,000 shares of $1.15 million.