Bell Potter says this speculative ASX stock could rise 200%+

This stock could more than triple in value according to the broker. But it is only suitable for high risk investors.

| More on:
Man with rocket wings which have flames coming out of them.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you have a high tolerance for risk and are on the lookout for big returns, then read on.

That's because Bell Potter is tipping one speculative ASX stock to rise more than 200% from current levels.

Let's dig a bit deeper now and see which stock could potentially more than triple your money if everything goes to plan.

Which ASX stock?

The ASX stock in question is Talga Group Ltd (ASX: TLG). It is a battery anode and advanced materials company aiming to accelerate the global transition towards sustainable growth.

Talga's Lulea Anode Refinery is the first of its kind in Europe. It will manufacture sustainable anode material for greener lithium-ion batteries from the high grade natural graphite mined from Talga's own deposits near Vittangi.

According to the note, the broker has retained its speculative buy rating and $2.35 price target on the company's shares.

Based on its current share price of 75 cents, this implies potential upside of 213% for investors over the next 12 months.

To put that into context, a $5,000 investment would become over $15,000 if Bell Potter is on the money with its recommendation.

What is the broker saying?

Bell Potter highlights that Talga has just released an updated Exploration Target (ET) for its Vittangi natural graphite project in Northern Sweden. It said:

The ET lifts from 170-200Mt to 240-350Mt at the same grade range of 20-30% graphitic carbon (Cg). The expanded range was supported by electro-magnetic surveys and conventional field mapping conducted since 2014, which identified significant conductors at depth and along strike from the existing Mineral Resource Estimate (MRE). Management believes the ET aligns with future demand from offtake partners.

The broker believes this project will be operational for a very long time. It adds:

We currently estimate a 24-year LOM on Stage-1, which consists of a 100ktpa mining rate producing ~19.5ktpa of Anode material. Stage-2 (BPe commencing 4 years post Stage-1) lifts production to over 100ktpa of anode material over 14 years. In our view, the updated guidance indicates to potential offtake partners (and strategic equity) that the Vittangi project is a long-life, high-grade and large-scale anode project of strategic significance.

Finally, supporting its speculative buy rating are the following factors. It concludes:

We maintain our speculative Buy rating and our valuation of $2.35/sh fully diluted and funded. Key milestones over the next 12 months which support our thesis for TLG include 1) Environmental permit clearance 2) Binding offtake for ~75% of production, 3) project funding (BPe 60/40 debt/equity) and 4) construction commencement (BPe 2HCY24).

Time will tell if the broker makes the right call on this speculative ASX stock.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Pilbara Minerals shares jumps 10% on big news

This lithium miner is having a day to remember on Wednesday. But why?

Read more »

Three miners looking at a tablet.
Materials Shares

Why Bell Potter says this ASX mining stock is a top buy

Let's see which stock the broker is tipping to deliver big returns.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Materials Shares

Down 39% in a year, why IGO shares still look overpriced

A leading expert doesn’t believe IGO shares are out of the woods just yet.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

This ASX 300 stock is surging 25% on US defence deal

The announcement of a 'a pivotal milestone' is getting investors excited today.

Read more »

A happy construction worker or miner holds a fistful of Australian dollar notes.
Materials Shares

$5,000 invested in BHP shares 5 years ago is now worth…

Will its shareholders be happy with their investment? Let's find out.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Materials Shares

Guess which ASX 200 stock is ending the week with a bang thanks to Rio Tinto

This stock has won a major contract from the mining giant.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Materials Shares

Is it time to buy ASX lithium shares?

Lithium prices continue to sink. Has this created a buying opportunity?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Materials Shares

Mineral Resources shares sink on Onslow Iron blow

This miner is having a tough session. Let's find out why.

Read more »