Investing in Graphene - the Nanomaterial of the Future

James Lee's picture

Name one material that has the following qualities:  superstrength, superconductivity, self-cooling, anti-bacterial, anti-corrosive, photovoltaic.   Carbon is one of the most abundant elements on the planet, yet in the form of graphene it has unique qualities. Graphene is a sheet of carbon that is just one-molecule thick. Rows upon rows of interconnected six-sided carbon molecules are linked together in a way that is unusually strong, yet flexible.

Despite its humble origins (it was first discovered by peeling a thin layer of pencil graphite using sticky tape), graphene is already showing a head-spinning array of research applications. Here are some headlines from the past few months:

Thin as paper and ten times stronger than steel

Graphene paper is six times lighter, two times harder, and ten times stronger than steel. Researchers believe that graphene could be used to make faster, lighter, vehicles that are fuel-efficient and generate considerably less pollution.

Graphene is 100x more electrically conductive than copper.

It conducts electricity with almost no resistance – promising a future of faster, more energy efficient computers and electronics.

Graphene is the thinnest anti-corrosion coating (and it’s transparent, too!)

Graphene is five times thinner than conventional anti-corrosion coatings. A one-molecule thick layer of graphene on a sheet of copper will slow the rate of corrosion by 85%.

Graphene creates electricity when struck by light

When a specially prepared sheet is struck by light of almost any wavelength, the material’s superconductive qualities convey the resulting temperature differential in the form of electricity.

Graphene transistors self-cool

Graphene transistors can convert a portion of heat-output back to electricity, making them cooler and more energy efficient.

Graphene’s anti-bacterial qualities make it ideal for wound-dressings.

Tests at Lanzhou University have demonstrated the graphene derivatives are bio-compatible with human cells, and can combine with chitosan (a blood clotting agent) to create a wound dressing that significant reduces healing times. One hypothesis suggests that the relatively thin cell walls for most bacteria make their DNA vulnerable to breakdown due to the exchange of electrons with graphene.

Granted, this is a pretty over-the-top list of applications, but if even just one or two of these breakthroughs are applied commercially, the opportunities will be enormous.

Investment Opportunities:

Research

Nearly 200 companies are involved in graphene research, including IBM (ticker: IBM), Intel (INTC), Sandisk (SNDK), and Samsung. While all of these companies have extensive patent portfolios, none of them are a “pure play” on graphene, as it is just a small part of their current R&D efforts. Samsung is currently the leader in research (with 60 patents) while Sandisk has roughly 30.

Mining

Since 2005, raw graphite prices have almost tripled. Annual graphite production is at about one million tons per year, seventy percent of which is coming from China. Interestingly enough, today’s lithium-ion batteries use more graphite than lithium. Roughly 130 pounds of graphite are needed for a single electric car battery.

Graphite is also an important component of the non-reactive pebble beds needed for the next generation of nuclear reactors. Rechargeable batteries and pebble beds reactors alone could double graphite demand by 2020.

It is difficult to invest in graphite directly, given that there is no futures market in the U.S. The simplest approach is to purchase shares of graphite mining companies.

The quality of graphite from China has been on the decline over the past few years and most of the recent mine development is happening in Canada. Focus Graphite (FCSMF) is one such company. It hopes to become the world’s lowest cost producer of large-flake graphite. Northern Graphite (NGPHF) is another Canadian mining company in pre-production phase. Like Focus, there are no revenues or profits yet, however, it seems further along the path towards financing and development. They expect to start production as early as 2013.

Processing graphite from raw mineral sources can produce large flakes that suitable for pebble-bed reactors and batteries. However, higher quality graphene can also be synthesized in the lab using industrial gases. This process, known as chemical vapor deposition, produces precise sheets of graphene suitable for use in semiconductors and microelectronics.

Industrial Production

Aixtron SE (AIXG) is a German company that has taken huge beating in the past year, but still looks expensive at 80x earnings per share, with very limited profitability on current revenues. The best way to think of this company is as a semi-conductor stock that is well-positioned to transition to graphene electronics.

At $0.55 per share, China Carbon Graphite (CHGI) is at the low end of its trading range and is attractively priced. It is also extremely speculative -- this one may be too volatile for most investors.

Graftech (GTI) is an old-line graphite manufacturer that has been in the carbon and graphite industry for over a century. First quarter sales and profits for 2011 were comparatively weak. Graftech is the twelfth-largest patent holder for graphene-related research.

CVD Equipment Corporation (CVV) just makes sense to me. CVD is a one-source destination for graphene production and quality control equipment. It also manufactures and sells graphene through a wholly owned subsidiary. Graphene is a large part of its business and on the basis of its financials alone appears to be worthy of consideration.

Currently at the low end of its price range ($13.25) CVD trades at just 20x trailing earnings. Both revenues and earnings per share nearly doubled last year. So far as investments in graphene are concerned, I have more confidence in CVV than any other.

Final Thoughts

Graphene has the ability to become a transformative technology for multiple industries, including chemical coatings, electronics, transportation, healthcare, and energy. Emerging technologies such as this can take a decade or more to move from the lab to widespread commercial adaption. Graphene technology today is where silicon technology was in the 1950’s. In the short-term, graphite seems to be benefiting from recent increases in demand, but the real game-changer is graphene.

As with most investments, it is important to understand your own tolerance for risk and perform your own due diligence. Most graphene-related investments are still high risk, and any portfolio allocations should be relatively small. For more updates, consider visiting www.investingingraphene.com

(Disclosure: I presently own shares of CVD Equipment Corporation, Sandisk, Focus Graphite, China Carbon Graphite, and Northern Graphite).

Comments

Graphene

Good summary. Unfortunately, the author omitted mention of the fact that Focus Graphite (on behalf of its shareholders) owns 40% of Grafoid Inc., a company which earlier this year announced to the world it had created economically scalable, pristine graphene and bilateral and trilateral graphene for use in broad commercial applications. Suggest you make a call to the material sciences department at MIT for a crash course in graphene commercialization.

Great

Graphene, you are right, this may be in this way... Focus Graphite (on behalf of its shareholders) owns 40% of Grafoid Inc

Production processes

There are plenty of new developments happening in graphene every week. One of the challenges of writing a piece such as this is picking and choosing the most relevant aspects of an emerging industry. Given the comparatively minimal information available on this announcement, it felt premature to mention it in the article. Readers are invited to form their own opinion by reviewing www.grafoid.com
About the Author: Jim Lee is the founder of Strategic Foresight Investments (StratFI). He is also the author of Resilience and the Future of Everyday Life, available on Amazon.com

Canadian mining co

Looking for name of Canadian minIng having discovered in the Artic graphene who's stock price is around a buck
Help with reply

Canadian Mining Firms

I've listed the two that I am the most familiar with....

About the Author: Jim Lee is the founder of Strategic Foresight Investments (StratFI). He is also the author of Resilience and the Future of Everyday Life, available on Amazon.com

Investment Options

A good list of graphene investment options is available at Invest in Graphene. As the science and production methods improve so too will the viability of the material. Without doubt graphene will be incorporated into a whole range of products, so expect to see it dominate the markets in the near future.

Interested in coodinating uses with graphenes properties.

Exceptional source of properties for innovating new uses.

postdoctorate in corrosion

Dear Sir

I am from Iraq, I work as lecturer in University of Basra,college of Science, Chemistry department in corrosion chemistry. In fact I hope you are help me to get postdoctorate agreement in corrosion field in your University as a supervisor .
with best regards.
Assist.Prof .Dr.Hadi.
University of Basra,college of Science, Chemistry department
P.BOX 2237 AL-AShar center, Basrah.mobile: +9647801131734

manufacturing search firm

The manufacturing industry is continual evolving due to globalization, technological changes, desire for more profitability, and efficiency in competition. These changes have created the need to review how manufacturing companies manage their employees. The traditional approach was concerned with only three aspects with linear relationships: Acquire, Engage, and Retain. The current generation of workers and the evolving manufacturing industry trend has made the tradition approach of talent management become less effective.

For example, many manufacturing companies have downsized their workforce through voluntary exits, but at the same time they continue the difficult task of hiring very skilled labor. As technology improves and the manufacturing process becomes more complex, more and more highly skill workers are needed. Since they are in high demand, the good ones will tend to possess certain qualifications that will enable them excel in their career. These workers are usually well trained, highly skilled, capable of complex trouble shooting, flexible and able to solving problems under minimal supervision.

After the competitive task of acquiring these people is complete, many manufacturing companies are faced with the dilemma of how to manage them. Many graduates who possess the above qualities belong to Generation Y. These are people born in early 1980s to early 1990s. They tend to be technologically savvy, versatile and would work in a company for only a few years before moving on to another. This is due to their life experiences and aspirations in life e.g. rise to senior level within a short time. This is unlike the traditional workers who are mostly content with their positions and can work for many years expecting a promotion.

Manufacturing companies are seeing the need to shift their style of talent management. One of the new approaches to talent management that should embraced to ensure their survival in the highly competitive world is the “holistic model”. This model encompasses three major interlocked aspects in addition to the previous three. These are Develop, Deploy and Connect with a strong emphasis on capability, commitment, performance, and alignment. The aspect of connect is important because the Generation Y employees want to work beyond the functional boundaries, they need to be involved in initiatives such as Total Production Maintenance, lean manufacturing , six sigma, supply chain optimization , global sourcing and complex product launches. These initiatives may go far outside the scope of the job description they were hired to do initially. To attract and retain the required talent, the work schedule need to be flexible, concepts such as telecommuting should be embraced so that some functions can be done at home, and the work environment needs to be tech- savvy.

In conclusion, as the manufacturing industries aim for global expansion, profitability growth, and productivity improvement; the significance of talent management will continue to increase in future because of the scarcity of the talents and aggressive competition among the manufacturing industries globally and within your tightening competitive sphere.

Have you noticed any generational differences in employees that you’ve found interesting or enlightening?

Anjela Mangrum, the co-owner of Mangrum Career Solutions, partners with manufacturing businesses to assist in their executive placement, onboarding, retention and outplacement needs. She also works to empower individual job seekers by helping them gain a competitive edge in their job search.
manufacturing search firm

Graphen - material of the future

I need to say that I am amazed by how widely the graphene might be used. By the way, I've found some more info about a graphene as well:

Jagged graphene edges can slice into cell membranes

A collaboration of biologists, engineers, and material scientists at Brown University has found that jagged edges of graphene can easily pierce cell membranes, allowing graphene to enter the cell and disrupt normal function.

It seems that in the future graphene can become a material as widely used as a steel or silicon is today

GRAPHITE MINE NEAR ARCTIC CIRCLE

Hello James!
Glad I found your site and blog!
I'm looking to find a particular graphite mining company that is near the Arctic Circle, that originally started in 1995,shut down in 2001,due to low graphite prices, I believe. It was most recently purchased in 2011,has a market cap of just under $30/million US Dollars, and supposedly is able to produce 16,600 Tons/Year. Any ideas? Thanks so much for any help you might be! Please respond by email, if possible.

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