NRGV - Energy Vault: An Opportunity For Contrarian Value Investors

2024-07-31 03:56:28 ET

Summary

• Energy Vault's stock has dropped over 60% in the past year, making it a potential opportunity for contrarian value investors.
• Energy Vault has an incredibly low EV/R ratio and a strong balance sheet. This should see them through temporary adversity.
• I'm issuing a Buy rating but suggest diversifying with other issues similar to Energy Vault.

Energy Vault Is A Fit For Contrarian Value Investors

I recently bought a position in Energy Vault Holdings, Inc. ( NRGV ). In doing so, I've chosen to go against the market: Shares are down 60%+ in the past year. Short interest comes close to a staggering 10%:

Such performance tends to scare investors away. Much of the time, that's justified, but in a few cases, going against the market is what true value investing is about. After all, value investing was conceived with the 1934 publication of Security Analysis. Just five years prior, its famed author Benjamin Graham had devastated his clients' accounts in the stock market crash of 1929. That timing is critical in understanding what value investing was at the time: It was truly contrarian. Because at the time of the publication of Security Analysis, the stock market in general had come down so much that equities were basically unwanted. Some equities in particular were avoided by the market, including the "net nets" from which Graham would eventually go on to make vast amounts of money from....

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