Is Blue Eagle Lithium a Good Investment? 10 Reasons to Consider It

Is Blue Eagle Lithium a Good Investment? This is answers this question.

There are many factors to consider when thinking about investing in lithium, so it can be difficult to know if you’re making the right choice or not.

Blue Eagle Lithium has had its share of ups and downs, but that doesn’t mean it’s impossible to make money off of it.

In fact, there are many advantages to this company that make it well worth considering as an investment option.

Before you continue, check out;

This article covers the top 10 reasons why you should consider Blue Eagle Lithium as an investment.

Is Blue Eagle Lithium a Good Investment?

The good news is that Blue Eagle Lithium may well be a good investment, but only if you’re not just buying it blindly. There are some factors that should weigh in before you make your final decision and consider any investment in Blue Eagle Lithium a good one.

First and foremost, know that there are some definite negatives associated with investing in Blue Eagle Lithium stock at all.

However, there are also benefits to owning Blue Eagle Lithium shares, so do your homework before pulling out your credit card or signing on for margin trading!

Here are 10 reasons to consider;

1) Demand for electric vehicles is only going up

People are becoming more and more interested in environmentally friendly products.

Last year, 16.5 million new cars were sold in China—and that number is only going up. People who want green vehicles have had limited options, but that’s starting to change.

For example, BMW announced recently that it would be selling its electric i3 for about $40,000 apiece. But wait!

2) There are lots of sources for lithium

Because it is found in a variety of minerals, there are plenty of places from which to draw lithium. So far, most of it comes from salt flats in Chile and Australia (though China is currently in an expansion phase).

This means that any major disruption to those supply lines would have only a marginal impact on prices.

We don’t really know how much lithium there is overall: Since we don’t actually know how much lithium these locations can produce, predictions about current or future demand can be unreliable.

All of these variables make precise predictions about lithium pricing tricky—although if you’re planning on investing, you should always expect some uncertainty.

And since traders are getting more bullish all over again , things could change quickly… but they might not change for good.

3) The company has secure supply contracts

While it is impossible to say for sure whether or not lithium supply contracts will be honored as demand for lithium skyrockets, what we do know is that companies like Rockwood have invested heavily in supply contracts with both major and minor producers.

When you invest in blue eagle, you are investing in access to some of these same supply contracts. In other words, these strategic investments give Rockwood more credibility when they commit themselves long-term and tie up capital.

After all, if no one would honor your contract under any circumstances, why would they honor someone else’s? Investing in raw materials through Rockwood gives you additional protection that others lack.

4) The company owns two very large projects in Nevada, USA.

The company owns two very large projects in Nevada, USA. One of them is called the Cobre mine and it contains 7 billion pounds of lithium brine which gives it an estimated value of $6.7 Billion.

The other project is named Palmetto and its estimate value is $5.5 Billion.

In addition, they have many smaller exploration properties which could bring their total value up to around $11 billion within 5 years due to anticipated increases in battery demand over that time period.

5) The company wants to grow – stock buyback program

Blue Eagle is in a period of aggressive expansion right now. The company’s stock buyback program is designed to shrink outstanding shares (thereby increasing price per share) while making investment dollars go further and paying out dividends as soon as possible.

As far as lithium stocks go, that’s not entirely common—many other companies are focused on exploration, while still others are held back by low prices or political instability in their respective regions.

Currently, it looks like Blue Eagle is poised for significant growth.

6) Very low cash burn rate – $3.7M in 2017

Over 2017, which is not even complete, blue eagle lithium has burned $3.7M. After backing out R&D and capex of $2.6M, that leaves only $1.1M of their burn rate going toward SG&A (sales and marketing expenses).

This means that with 4 months left in 2017 they will have spent only $17.5M on everything year-to-date while bringing in revenue of $14.9M YTD.

7) Management team incentives aligned with stock performance

When an executive receives stock options that vest upon performance goals, he or she has incentives to increase shareholder value by increasing revenues and earnings per share.

Such stock options typically have more favorable tax treatment as compared with other forms of compensation.

Employee ownership can also be a key ingredient in motivating people at all levels of your company. The tax laws are very generous when it comes to compensating employees through equity ownership. You can grant up to $35,000 per employee for 2012.

The IRS won’t hold you accountable for additional compensation unless you put such limitations in your plan document or incentive agreement—and then only if they are unreasonable limitations based on such factors as rank, length of service and market conditions.

8) Strong insider ownership

The best thing about insider ownership is that it’s a sign of long-term commitment. If you have owners who are putting their money into the company they believe in, they’re likely going to want it to succeed long-term.

A high level of insider ownership means that those shareholders are going to be committed long-term and will likely resist any offers from would-be acquirers because they don’t want others owning their equity.

That doesn’t mean that all insider purchases are great investments—just make sure there isn’t any significant selling or negative news before deciding whether or not a stock is worth investing in.

9) Buybacks can decrease the float and increase price per share

Many companies will buy back shares of their own stock (as opposed to distributing dividends) because it can increase their earnings per share, lower their price-to-earnings ratio and reduce risk by reducing float.

Buying back shares lowers your outstanding number of shares while simultaneously increasing your earnings per share.

This is one reason investors have been supportive of Apple’s massive buyback program as they watch its EPS rise while its stock price remains relatively stable.

According to S&P Capital IQ, Apple has bought back more than $16 billion worth of its own stock in 2013, so far. With about $137 billion remaining in cash on hand as of December 2012, Apple still has plenty of money left over for future buybacks.

10) A possible merger deal with Canadian Energy giant Nemaska Lithium Inc. (OTCQX:NMKEF; TSXv NMKE), which could also help drive battery demand higher

First, let’s take a look at what’s going on in lithium right now. The industry is currently experiencing an oversupply of supply (which typically translates into low prices).

However, many battery experts believe that upcoming electric vehicle demand will help spur higher prices. As such, there are some investment opportunities worth exploring… But before you invest in anything, do your due diligence.

This means doing thorough research on any company you think might be worth investing in. Some key things to look at include: management expertise, balance sheet strength and most importantly – supply contracts/projected demand for their products…

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