Stockchase Insights Largo Resources Ltd. LGO-T HOLD Jun 21, 2021

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Good potential in its battery business. Shows good growth, the valuation is historically cheap at 8x earnings and the balance sheet is solid. Would wait for better momentum to add. Unlock Premium - Try 5i Free

LGO is cheap, and growing again, but it does not generate much cash yet (only $3.5M in 2022). 
It had a big miss on earnings last quarter, and the CEO left suddenly (likely fired). 
The stock has not participated in this year's rally, and we think investors can move on.  
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Very attractive resource. 
Current share price presenting good buying opportunity.
High demand for electric vehicles good for business. 

Junior resource sector deeply out of favour. Vanadium offers incredibly utility as an adjunct to steel and specialty metals. Most is produced in China, and the world is looking geopolitically for a more secure source, like LGO. Political risk in Brazil.

Free cashflow and mining prospects have not gown down, even as the stock price has, making it better value. Also leases vanadium and recycles it. He's fascinated, especially as vanadium batteries get attention.

He's still bullish on vanadium. Mining market in general has had a very difficult year. Vanadium is a minor metal and hasn't attracted the market yet. Malaise sets the stage for a rebound. Longer-term supply/demand fundamentals are attractive.

Share price not performing well. However, believes demand for products will remain. Would recommend holding to see how company performs. 

One of the few companies in the world that's cashflow positive in the vanadium business. Worldwide growth in specialty steels. He keeps holding because he loves out-of-favour commodities.