Time to grab this “Code Red Stock”

Shah Gilani|August 12, 2021

On Monday, the Intergovernmental Panel on Climate Change (IPCC), which the United Nations calls its “body for assessing the science related to climate change,” released its latest report titled, AR6 Climate Change 2021: The Physical Sciences Basis.

AR6, the Panel’s sixth Assessment Report on climate conditions, authored by 234 scientists and researchers, runs 3,949-pages and was so shocking U.N. Secretary General, Antonio Guterres, claimed it represented a “code red for humanity.”

The climate anxiety isn’t unwarranted. The atmosphere is warming, the AR6 proves such and 195 countries support its findings that human-caused greenhouse gas emissions have, in no uncertain terms, led to significant global warming that is only getting worse.

According to Bloomberg, the IPCC authors have finally done away with some of the caution, waffling language, and uncertainty that marked past reports. And that stronger viewpoint has been backed by real-world disasters. Summertime in the Northern Hemisphere has been marred by severe flooding across Europe and China, as well as alarming drought and the early onset of large wildfires in the Western U.S. and Canada. One of the coldest places on the planet, Siberia, has experienced severe heat and forest fires. Just this past weekend brought disturbing footage of people fleeing sprawling wildfires in Greece.

The report’s unequivocal emphasis on scientific understanding likely means key findings will be formulated as statements of fact by climate change activists and politicians and drive policy proscriptions worldwide.

I am not alone in anticipating a surge of support of the 2015 Paris Agreement and alternative energy solutions by politicians here in the United States. This is the beginning of massive changes to the way businesses are run and what stocks will flourish in a post-AR6 world.

Time and again, climate change reports point the blaming finger towards fossil fuels and other carbon dioxide, methane, and sulphate emitting culprits. The difference now is that changing politics and climate anxiety will drive investor capital into new alternative technologies and push them beyond day dreams and into reality.

But one piece of tech is already here. I’ve talked about my love of the electronic vehicle (EV) space before as a moneymaking stock trend, but the technology’s roots lay in the need to reduce the worst polluting factor our world faces: carbon dioxide.

While that’s mostly common knowledge, what’s not so well known is that China is the world’s biggest polluter, especially of carbon dioxide from their coal burning utilities and plants and from the country’s rapidly growing numbers of autos and trucks.

The puts China in the global “hot seat.” That’s why Chinese authorities are pushing electric vehicles.

In fact, it’s already the world’s largest market for EVs and is setting new goals for EV adoption, which, of course, support Chinese EV makers like Nio, Li, and Xpeng.

The good earth play here, however, isn’t to invest in those carmakers, though they are all good companies and good bets. If you zoom out a bit and see the bigger picture, you’ll see that the real play is the Chinese company that makes the batteries those vehicle makers rely on to make their EVs go.

Ganfeng Lithium Co. Ltd. (GNENF) mines lithium in China and Argentina, has operations in Ireland and Mexico, and manufactures lithium batteries it sells to all of China’s big EV makers.

The company generates solid revenue, sports an 25% profit margin which means it’s very profitable, and is the reason Gangfeng has generated a compounded annual growth rate (CAGR) of 41% since 2015.

Earnings growth this year is expected to hit triple-digits, which is spectacular.

With the UN report pointing to all things electric in our future, I’m pointing to Gangfeng’s future as the bet to make on everything EV in China and beyond.
Cheers,

Shah