The Metal Company (TMC) has climbed 160% in the last three months and is already up another 15% so far today in Friday morning’s trading session.
But, after a period of sustained growth, the stock dipped hard this week – falling more than 30%. What’s causing the volatility with this stock – and what does it all mean for investors like you?
The company engages in deep sea mining for mineral formations – which are the key inputs for producing batteries. While the Metal Company has had much success, they’re starting to face pressure from political opposition that will hinder continued growth.
For example, a number of members of the British Parliament came together to voice their opposition in a formal letter. They expressed a sentiment that the operations this company uses are too big a risk to the long-term health of our deep-sea ecosystems.
Britain’s parliament isn’t the only opposition to the Metal Company, either. Just last month the European Academies Science Advisory Council expressed their own concerns. They lobbied for a complete moratorium on deep sea fishing, citing many of the same potential environmental dangers.
That being said, the future of the Metal Company is fairly uncertain right now. We do know this, though – there may be a resolution in the near term. A UN organization – International Seabed Authority (ISA) – is meeting in Jamaica to work towards building a framework for regulating deep sea mining.
In the meantime, what should you do with TMC from an investment perspective? The stock IPO’d at $10/share and eventually reached a high point of nearly $12/share. But since then, it’s plummeted to where it sits today – just over $2/share.
Watching its performance in the last few months may have you optimistic that it’s rallying back toward its pre-pandemic highs. But below, we want to share 3 things that will offer clarity on this stock – which we’ve uncovered through the VectorVest stock analyzing software.
Despite Fair Timing, TMC Has Poor Safety and Very Poor Upside Potential
The VectorVest system helps you simplify your trading strategy through a proprietary stock-rating system. You’re given all the insights you need in 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).
Each of these sits on a scale of 0.00-2.00, with 1.00 being the average - allowing for quick and easy interpretation. But it gets even better.
Because based on the overall VST rating for a given stock, the system offers a clear buy, sell, or hold recommendation at any given time. As for TMC, here’s what you need to be aware of before you do anything with this stock:
- Very Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year forecast) to AAA corporate bond rates and risk. And right now, the RV rating is about as poor as it gets at 0.07. Moreover, the stock is overvalued even at the low price it sits at today - with a current value of just $0.17.
- Poor Safety: In terms of risk, TMC is not a safe stock - as evidenced by the poor RS rating of 0.70. This rating is derived through an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
- Fair Timing: While the stock has skyrocketed in the last 3 months, that trend turned around this week. As such, the timing for TMC is just fair at 1.00, right at the average. This rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 0.74 is poor for TMC - does that mean it’s time to cut losses if you currently own shares of this stock? Or, should you weather the storm and hold out a bit longer? Get a clear answer on your next move with a free stock analysis at VectorVest today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. While TMC stock has trended well in the past 3 months, it hit a road bump this week - and now it just has fair timing. Moreover, the stock has poor safety and very poor upside potential as concerns of its future loom large.
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