One of the best ways to spot opportunity is to hunt for temporary weakness.
In fact, it’s how some of the most famous investors made their money.
As Warren Buffett would say, “Be fearful when others are greedy and greedy when others are fearful.” Or, as Sir John Templeton would say, “Buy at the point of maximum pessimism.”
We’ve found three stocks where temporary weakness could create long-term opportunity in biotech, gaming, and mining.
Hot Stock No. 1 – Standard Lithium (SLI)
Weakness may be an opportunity with Standard Lithium.
While the stock was bashed by a short-seller report in February, don’t write off the stock just yet. For one, the company fought back against the allegation, and two, the lithium story isn’t cooling off. At least, not any time soon.
Remember, countries all over the world want a greener future, and millions of emission free electric vehicles on the roads. Even major automakers are adopting EV models, replacing fleets of gas guzzling autos. But for that to happen, we need lithium, which we’re running short of.
Fortunately, that’s where companies like Standard Lithium (SLI) may be able to help.
At the moment, the company is focused on its 3,140,000 tonne LCE Indicated Resource -150,000-acre joint venture Lanxess Project, located in south Arkansas.
In addition, according to CEO Robert Mintak’s interview with CNBC’s Jim Cramer, its Lanxess Project in Arkansas is well positioned to serve the U.S. EV market, and could help facilitate exports to Europe as well. Also, its project is located in the Smackover brine region of Arkansas – which is known to hold some of the richest lithium resources.
Hot Stock No. 2 – Marathon Digital Holdings (MARA)
After plummeting with cryptocurrencies, MARA is regaining lost ground.
Not only is it recovering with Bitcoin, and on estimates the currency could see $100,000, it’s pushing higher on solid earnings growth.
As of January 2022, the company produced approximately 3,197 self-mined Bitcoin in fiscal year 2021, an 846% increase. It produced 1,098 self-mined Bitcoin during Q4 2021, including a record 484.5 self-mined bitcoin during December 2021. It also increased total bitcoin holdings to approximately 8,133 BTC with a fair market value of approximately $375.8 million
Helping, Jefferies analyst Jonathan Petersen, as noted by TheFly.com just “initiated coverage of Marathon Digital – which he sees being on pace to become the largest public Bitcoin miner on an EH/s basis in 2022 – with a Buy rating and $51 price target.”
In addition, BTIG analyst Gregory Lewis initiated a buy rating on the stock with a price target of $50 a share. The analyst believes MARA is well positioned for the ongoing BTC mining up-cycle.
Hot Stock No. 3 — Luminar Technologies (LAZR)
Lidar Technologies was off to the races following its IPO in 2020. Unfortunately, the lidar tech stock would spend much of 2021 in the doghouse, as optimism wore off. However, don’t write the stock off just yet. The company is still making progress as top automakers starting to incorporate lidar technology, or light detection and ranging in their cars.
In addition, the company recently announced that NVIDIA selected Luminar’s lidar sensors for its DRIVE Hyperion autonomous vehicle platform.
In fact, according to a NVIDIA press release, “Our collaboration with Luminar bolsters the DRIVE ecosystem of companies that are focused on building best-in-class technologies for enabling autonomous driving functionalities,” said Gary Hicok, Senior Vice President of Engineering.
Even Volvo just announced it was teaming up with Luminar to test its self-driving car. “With Luminar as standard on every vehicle, (Volvo’s) next SUV has the opportunity to be the safest vehicle ever produced, while also being the first to enable true autonomy and at highway speed,” Luminar CEO Austin Russell said in a recent press release.
Plus, it looks like there are plenty of bulls behind the wheel at the company.
Not only did the company recently announced a $250 million stock buyback, it announced its insiders were buying shares, including CEO Austin Russell, who, according to Barron’s, is encouraged by the company’s momentum and potential for lidar.