TFSA Investors: 1 Chemical Value Stock Set to Rise in 2021

·3 min read
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5N Plus (TSX:VNP) is a leading global producer of engineered materials and specialty chemicals with integrated recycling and refining assets to manage the sustainability of the company’s business model. The company is headquartered in Montreal, Québec, and operates research and development (R&D), manufacturing, and commercial centres in several locations in Europe, the Americas, and Asia.

The company deploys a range of proprietary and proven technologies to produce products that are used as enabling precursors by 5N’s customers in a number of advanced electronics, opto‐electronics, pharmaceutical, health, renewable energy and industrial applications. Many of the materials that 5N produces are critical for the functionality and performance of the products and systems produced by the company’s customers.

Extensive refining capabilities

Further, the company is an integrated supplier, having both primary and secondary refining capabilities. 5N’s primary refining capabilities allow it to treat very low‐grade metal concentrates, and extract and refine the metals of interest. Once refined, these are fed to 5N’s secondary refining operations, where the company attains the highest level of purity.

Once purified, 5N’s metals are sold to customers in the form of pure metals, alloys, or chemicals. Because 5N can perform extensive refining functions, the company is considered to be a supplier with integrated refining capabilities. In addition, 5N’s primary refining capabilities enable it to treat complex feeds and very low‐grade concentrates containing only small amounts of the metals of interest, playing an important role in the recycling of the specialty metals that it produces.

Certified operations

Purification and manufacturing activities are carried out by 5N, using a variety of metallurgical and chemical processes. 5N’s raw materials are generally in the form of concentrates or recyclable materials containing the metals of interest. Given the nature of 5N’s activities and the metals that it purifies, the company operates under stringent environmental, health, and safety conditions.

Several of 5N’s operations are either certified or have approval from the United States Food and Drug Administration (FDA), reinforcing the company’s commitment to best practices in terms of operations, quality, and health and safety. For fiscal 2020, 46% of 5N’s revenues were derived from the electronic materials segment and 54% from the eco‐friendly materials segment.

Diverse market segments

The electronic materials segment is managed by the electronic materials executive team that oversees locally managed operations in North America, Europe and Asia. The electronic materials segment manufactures and sells refined metals, compounds, and alloys, which are primarily used in various electronic applications. Typical end‐markets include security, aerospace, sensing and imaging, renewable energy, and technical materials. Main products are sold either in elemental or alloyed form as well as in the form of chemicals and compounds.

5N’s eco‐friendly materials segment is closely associated with bismuth. Bismuth is one of the very few heavy metals, which has no detrimental effect on either human health or the environment. As a result, bismuth is being increasingly used in a number of applications as a replacement for more harmful metals and chemicals.

Overall, 5N’s products are of substantial importance in today’s clean-energy world.

The post TFSA Investors: 1 Chemical Value Stock Set to Rise in 2021 appeared first on The Motley Fool Canada.

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Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

2021

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