ASX stock of the day: Talga (ASX:TLG) shares rocket 23%

What’s going on with the Talga Group Ltd (ASX: TLG) share price today? Talga shares are up an extraordinary 23% today. Here’s the 411.

| More on:
mining asx shares represented by miner writing report on clipboard

Image source: Getty Images

Talga Group Ltd (ASX: TLG) shares are on fire today. At the time of writing, the Talga share price is up a staggering 22.79% to $1.67 after closing at $1.36 last week and opening at $1.51 this morning. In earlier trade, the company’s shares rallied by almost 32% to $1.79 before retreating to their current level. 

Until today, Talga had not been having a very successful 2021. Year to date, Talga shares had fallen by more than 25% at Friday’s closing price, and even after today’s move, remain down by around 10% in 2021 so far. However, Talga is up by around 36% since 31 March. Over the past 12 months, the company has also done extremely well, up by more than almost 380%.

So what is Talga? And why is this company worth almost a quarter more today than it was on Friday?

What is this company?

Talga is an ASX materials and technology company. It hopes to be a vertically integrated player in the mining and manufacturing of battery anodes, specifically those made from graphite and graphene. Talga owns the Vittangi Project in Sweden, which is reportedly one of the world’s highest-grade graphite depositories.

The company plans to use the minerals from this project to manufacture “a high margin coated anode product known as Talnode to be sold to lithium-ion battery cell manufacturers”. Talga tells investors that it has 36 customer “engagements” for Telnode, including “six major global automotive OEMs”. 

So why is the Talga share price rocketing today?

Today’s share price move is a strange one. That’s because it has not been prompted by any fresh news or announcements out of the company today. The Fool isn’t the only one who has noticed this either. This afternoon, Talga was issued with a please explain speeding ticket by the ASX over the dramatic surge in the valuation of its shares.

In response, the company stated that it was not aware of any unannounced information that might be affecting the Talga share price today. However, it did note that “the battery materials sector, in which Talga operates, has recently seen a significant increase in positive sentiment”.

It’s also worth discussing the announcement that Talga made last week. Although this was back on Monday, it’s possible that a large investor has taken late notice.

In this announcement, Talga reported that the design of its electric vehicle anode qualification plant in Northern Sweden has been completed, and “engineering is progressing well”. Further, Talga stated that “requisite procurement work has commenced with orders placed for major equipment”. Once complete, the plant will also house a “fully equipped battery materials laboratory, including battery cell making facilities for cycle testing”.

That’s all of the news out of Talga today. As mentioned earlier, it is possible that a large or institutional investor has made a significant buy into the company. This may have caused the massive appreciation in the Talga share price. ASX data shows that, as of the time of writing, 6.1 million Talga shares have traded today. That’s significantly above the 464,500 shares that swapped hands on Friday. 

At the current share price, Talga has a market capitalisation of $488 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Materials Shares