MM thoughts on Novonix (NVX)
Long time member first time question, I'm just looking for your thoughts on Novonix, I bought in back in June at $2.30, I took half off at $5
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Thanks for your ongoing support of Market Matters. It feels like we’ve now been around a while and 2022 is going to be a big year! NVX is a ~$4bn company that develops and manufactures energy storage equipment, a huge issue as the energy transition gathers momentum – speaking with companies in the space like APA Group (APA) transmission & storage are clearly critical. In terms of strategy, when a position like this rallies so aggressively, the approach you have taken is spot on, and reduces the overall risk, these are often volatile stocks, today (Friday) being a clear example with shares down ~32%.
While there was no company news I could see yesterday, Tesla has recently tried extend a tariff waiver for Chinese graphite which is a negative for NVX. It was announced yesterday that NVX would be added to the ASX 200, along with Event Hospitality (EVN), Imugene (IMU), Liontown Resources (LTR) & Paladin (PDN). While you’d think that is a positive, it’s not in the short term. NVX was a large weighting in small cap indices however it will become a small weighting in the large cap indices, and therefore the index tracking funds are likely to be net sellers overall.
