When it comes to Meta Materials (NASDAQ:MMAT), it seems like everyone is focused on what happened with its now unlisted preferred MMTLP shares. That’s understandable, but let’s not get distracted from the compelling value proposition of MMAT stock. The reward-to-risk profile looks favorable now for anyone interested in exposure to the potential upside of the functional materials industry.
Consider this: The Israel Innovation Authority allocated the equivalent of $43 million to establish new consortia to support several technologies, including meta-materials. Is it possible, then, that the functional materials market will gain further traction next year?
It’s definitely possible, but you don’t have to wait until 2023 to take a position in Meta Materials. Be aware of what traders are talking about, yes, but also focus on Meta Materials’ turnaround story, which could take the skeptics by surprise next year.
What’s the Buzz Surrounding Meta Materials?
So, let’s talk about the 800-pound gorilla in the room: Meta Materials spun off oil and gas subsidiary Next Bridge Hydrocarbons by providing former Meta Materials preferred shares (MMLTP, currently unlisted) owners with shares of Next Bridge. Next Bridge shares are not trading publicly.
Along with that soap opera, there’s the matter of Torchlight Energy, the now-defunct precursor to Meta Materials, being a target of an alleged pump-and-dump scheme. That situation doesn’t seem to have much bearing on Meta Materials now, however.
MMAT Stock Deserves a Re-Rating
It’s understandable if folks who held preferred MMTLP stock are confused or frustrated now. Yet, clear-minded investors should separate that situation from MMAT stock and its upside potential.
Astoundingly, shares of Meta Materials just surpassed the $1 level even though they started 2022 at nearly $3. Therefore, a $2 price target really isn’t too much to ask for. We’re not even talking about a full price recovery here.
It seems like the market has completely forgotten the positive news concerning Meta Materials and the industry in which it operates. It’s a global phenomenon, though, and an IDTechEx report predicts that the meta-materials market will reach $8.7 billion by 2043.
Meta Materials is a premier player in this industry with hundreds of patents in the meta/functional-materials niche. Moreover, the company recently opened its global headquarters and Centre of Excellence in Canada.
We’re talking about a 68,000-square-foot, state-of-the-art manufacturing facility. Meta Materials could ramp up its operations very quickly over the next 12 months. Just think about the effect this might have on MMAT stock.
What You Can Do Now
People are buzzing about Meta Materials, but perhaps they’re being distracted by certain news items. These include the alleged pump-and-dump scheme, as well as the events surrounding the former preferred MMTLP stock shares.
It’s important to know about these developments. But they deflect attention from Meta Materials’ patent portfolio and new manufacturing facility.
Therefore, if you’re bullish on the functional materials market, feel free to take a stake in MMAT stock. Set your sights on a $2 price target, which is quite reasonable in the grand scheme of things.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.