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Does MM like Syrah Resources Ltd (SYR) for graphite exposure?

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Question asked 26/05/2023

Does MM like Syrah Resources Ltd (SYR) for graphite exposure?

Thanks a lot for taking this question. Syrah Resources is the only vertically integrated, natural graphite, active anode material producer of scale outside of China. Telsa is a foundation customer; and it is building a large active anode material facility in Louisiana. It has US$84m in cash to fund these activities, and will access the US Department of Energy Loan and Grant, supplied under the US Clean Energy Inflation Reduction Act. The Share price closed at $0.855 25/5 (52 Week High $2.69 and Low $0.845). The Non-Executive Chairman has bought 200,000 shares total $182,000 at $0.91 per share on 19/5. Would like to know what is your opinion on SYR short to medium term. Thanks again for taking this question

Answer

Hi Peter,

We’ve been asked about Syrah (SYR) a few times recently and have answered (here) & (here). For all our new subscribers, worth noting that if you visit the company page for each stock (link to SYR here), down the right hand side (below the fundamental data) all past questions on that particular stock are listed.

In terms of SYR, what we wrote when the stock was above $1.20 still holds up:

If we were to buy a Graphite stock, Syrah (SYR) would be our preferred pick.
A buy price ~$1.00 looks interesting from a risk/reward perspective, however this is an incredibly volatile stock/sector, with plenty of risks in the near term. We are unlikely to step up to the plate.
If all goes to plan, SYR is worth around ~$2 in our view, so buying nearer $1 makes sense from a risk/reward perspective.
Note, this is a very high-risk stock.

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Syrah Resources Ltd (SYR)

LAST UPDATED 26/05/2023 10:02

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