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Go All-in on Graphite With Westwater Resources Stock

When it comes to investable resources, most traders focus on gold and silver. However, there’s more to the resource space than those metals, and I invite you to consider Westwater Resources (NASDAQ:WWR). You might not have heard much about WWR stock, but the momentum in this under-the-radar name is compelling.

a line of AA batteries to represent graphite stock WWR stock
Source: Shutterstock

Investors who owned WWR stock prior to October probably didn’t have much to say about its price action. Yet, there was a nice October surprise in store for them.

Westwater isn’t only interesting because of its price action. This company is worth your attention because resource sector investors ought to think about expanding their horizons beyond the popular minerals that so many traders obsess over.

Don’t get me wrong, as I still want you to be selective when choosing resource companies. After all, there is always risk involved in this space. Hopefully, after learning about Westwater Resources, you’ll find that the reward-to-risk ratio is favorable for this niche miner.

WWR Stock at a Glance

Prior to this month, you probably wouldn’t have seen WWR stock on the front page of many financial publications. Unfortunately, the stock started 2020 above $2 but descended below $1 in early April.

This drawdown in price was, at least in part, most likely due to the onset of the novel coronavirus. The global pandemic took a major toll on the resource sector. So, it shouldn’t be too surprising that WWR stock stayed depressed for a number of months.

Patient shareholders were rewarded, however, as the stock price was back above the $2 level in late September. Then a key event took place in early October which pushed WWR to its 52-week high of $14.50.

If you haven’t taken a position in Westwater Resources stock yet, that’s fine because the share price has retraced back to the $6 area. This is a better entry point that allows much more room for upside if the bulls take back control of the price action.

Narrowing the Focus

In a move that changed the company’s focus dramatically, Westwater Resources agreed to sell its uranium business to enCore Energy (OTCMKTS:ENCUF).

This represents a quantum leap forward for Westwater Resources because now the company can really focus on graphite production. Without having to expend resources on uranium, Westwater is a major step closer to its goal producing battery-grade graphite by the end of 2022.

Of course, the uranium business sale will also provide Westwater Resources with a capital infusion. Perhaps the company can use this capital to further develop its Coosa Graphite Project in Alabama. This is where Westwater controls more than 40,000 acres of mineral leases as well as a graphite deposit that has over 27 years of life.

Executive-Level News

You might be wondering what caused the WWR stock price to jump in early October. What happened was that President Donald Trump enacted an executive order intended to “reduce the Nation’s vulnerability to disruptions in the supply of critical minerals.”

The text accompanying the executive order specifically mentions graphite several times. While not stated, there’s an implication that the U.S. may take actions to promote exports and/or limit imports of graphite.

Most people probably don’t even realize how important graphite really is. It’s used in cars, smartphones, laptops, flashlights, smoke detectors and other products.

As you might expect, Westwater Resources CEO Christopher Jones was pleased with Trump’s executive order. Jones declared that the order “opens up new avenues for financing and permitting our Coosa Graphite Project.”

The Takeaway

Now that the WWR stock has come down from its 52-week high, there’s an entry point available at a more favorable price. So, if you’re bullish on graphite, WWR is worth buying and holding as even the White House is now focusing on this essential mineral.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. 

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