Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) has been an incredibly interesting stock to watch as of late. After hitting a peak on November 13th, the stock has been trading down for some time, with another 3%+ decline today. While this may lead to fear among the masses, it’s likely a strong play for those with a decent appetite for risk. Today, we’ll talk about why the stock reached a high in mid-November, why it has been down since, what we’re seeing today, and why the CNA Finance team believes that NAK is a strong long-run play.
Why NAK Ran Early On In November
As mentioned above, since reaching a high back on November 13th, Northern Dynasty Minerals has been trading downward. So, why did the stock climb? Well, the answer is a relatively simple one. Over the past year or so, the company has been releasing positive news surrounding their flagship venture – the Pebble Project.
This project had been riddled with issues in the past from the EPA. However, a settlement was reached with the EPA earlier this year, allowing NAK to apply for permits. From there, we’ve seen quite a bit of information surrounding the progress of the Pebble Project.
During these updates, the company has consistently hinted at the idea of bringing on partners. Of course, this would be a great thing. After all, the Pebble Project is a massive one with plenty of potential to be shared. However, there are also plenty of costs to be shared. As a result, partners are needed in order to make things happen.
In the most recent updates, NAK made it clear that they are close to closing some key partnerships. While the names of the companies that will be included in these partnerships haven’t been released, there has been a lot of speculation about who the partnerships will be signed with and when. This speculation hit a high back in the beginning of November, and with investors expecting partnerships just around the corner, the stock started to find its way toward the top.
Why We’ve Seen Declines Recently
At the end of the day, the speculation surrounding partnerships led to expectations of an announcement of one or two being signed. Unfortunately, we haven’t seen any news of a partnership being solidified. As a result, investors started to get cold feet, leading to declines in the value of Northern Dynasty Minerals.
What We’re Seeing Today
As investors continue to await news of a partnership, more and more seem to be exiting their positions, leading to declines on the stock. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (11:35), NAK is trading at $1.99 per share after a loss of $0.08 per share (3.86%) thus far today.
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Why Now Is The Time To Consider NAK – Taking A Lesson From Buffett!
One of the most important lessons that I’ve learned from Warren Buffet is that you have to buy when fear is high and sell when greed hits a high. At the moment, fear is high on NAK, making the stock a compelling buying opportunity. Here’s the reality…
The reality is that not much has changed surrounding Northern Dynasty Minerals and the potentially profitable opportunity the company brings to investors. The Pebble Project is still well on its way to approved permits, and partners are still likely to come down the line. Not to mention that the Pebble Project, when completed, will be one of the largest mines of basic materials in the world with the potential to generate massive levels of revenue.
The declines that we’re seeing are the result of nothing more than impatience among investors. At the end of the day, NAK is likely to announce partnerships soon. When they do, the stock is likely to climb. From there, there are tons of positive catalysts on the horizons. These include permitting catalysts, breaking ground catalysts, and much, much more. So, while fear is high and the stock is down, the value is still there. As a result, getting in while fear is high will likely give savvy investors with a decent appetite for risk an opportunity to get in on the gains at a steep discount.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NAK. In particular, we’ll continue to watch for updates with regard to both partnerships and the permitting process surrounding the Pebble Project. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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