Is it all hype?
Graphene sounds like a miracle substance– but is it too good to be true? The knowledge regarding the material, as well as the full extent of its applications and practical uses, is still in its infancy. If the stuff lives up to the hype, we may very well be at what Nokia called the “beginning of a graphene revolution.” IBM and Samsung — just to name a few — are companies that, like Nokia, seem to have lot of faith in graphene.
Like the substance itself, however, it seems that investing in graphene is still in its infancy as well. One discounted, more speculative play that may be at a great advantage to benefit from the potential “graphene revolution” directly, however, is a small-cap that operates as a specialty chemicals and performance materials company.
Pioneering graphene-based battery applications
The rechargeable battery market, according to research firm Avicenne, is poised to reach $18 billion by 2020. The small-cap company, Cabot Corp (NYSE:CBT) is likely to benefit greatly from this trend. With its LITX G700 conductive graphene-based additive, the company has released an additive for high energy density battery applications that can be used in electric vehicles.
The company has also recently released a second product, the LITX-200 additive, “which was designed to get the most power from a lithium-ion battery without compromising energy density or increasing cost.” This additive is intended for use in conjunction with tablets, hybrid EVs, and smartphones.
Conclusion
Cabot Corp (NYSE:CBT) is more of a lithium-ion battery maker than a pure graphene play as of now, but the company is gaining an advantage in its market by pioneering the use of graphene as an additive for high-density battery applications. The company is also looking to develop and innovate even further with the substance, as well. The company’s Chief Technology Officer, Yakov Kutsovsky had this to say:
“We recognize that graphenes have the potential to improve performance in a number of applications from advanced batteries to conductive plastics and tires. We see it also leading to new, stronger composite materials… Cabot has made and continues to make investments in graphene technology. This enables us to have a robust platform capability in which to test and further develop graphene materials.”
Cabot Corp (NYSE:CBT) currently trades at a low P/E ratio around 6 and offers investors a dividend yield of 2.1%, according to Yahoo! Finance, and is a company that will give you exposure to graphene going forward — by further developing the technology and also utilizing it to enhance their existing products.
The article This Small-Cap Will Help You Profit From the Next Big Thing originally appeared on Fool.com and is written by Joseph Harry.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
