Whether you love him or hate him, you can’t deny the fact that Elon Musk is a consummate showman; he knows how to promote.

When he introduced Tesla Inc.’s (NASDAQ: TSLA) latest vehicle – the Model 3 – back in 2016, almost half a million customers were willing to deposit $1,000 just to secure a place in line.

That helped to kick off a massive run-up in demand for lithium-ion (Li-ion) batteries, which power the vast majority of electric vehicles.

Now, a lot goes into making Li-ion batteries, but what isn’t commonly known is that one metal in particular is absolutely critical.

So important, in fact, that the average 60-kilowatt electric vehicle (EV) battery holds a whopping 18 pounds of the stuff.

By some estimates, total demand for this substance will more than quadruple in just the next 15 years, thanks mostly to surging EV production.

The thing is, supply is already severely challenged. Most of the world’s supply comes from one African nation with a wild history of instability and conflict.

But I’m going to show you a special investment with a low-risk business model and potential for staggering upside as demand intensifies.

The Worldwide Car Industry Is Spending Billions

That’s right – the international car industry is investing over $100 billion to develop and produce EVs. That’s just to start.

Just recently, the Saudi sovereign wealth fund committed $1 billion to Lucid Motors, an EV maker. That’s Saudi, as in Saudi Arabia – the country with about 16% of the world’s proven petroleum reserves, leader of OPEC, and 87% of budget revenue from oil.

In the next five years, no less than 40 “gigafactories” will be built. They will churn out massive amounts of Li-ion batteries.

For the most part, that’s not “anticipating” demand. These factories are built based on firm orders.

That’s where cobalt comes into the Li-ion battery story. Here’s what you need to know about cobalt and lithium-ion batteries.

Although cobalt has multiple industrial and commercial uses, the most dominant by far is in batteries, representing half of demand.

And cobalt is a significant part of lithium-ion batteries.

Lithium cobalt oxide batteries, common to laptops and smartphones, contain roughly 60% cobalt. Lithium-nickel-cobalt-aluminum oxide batteries, with about 9% cobalt, are the most appropriate type of high-load battery being used in larger storage projects.

And lithium-nickel-manganese-cobalt oxide batteries contain about 10% to 20% cobalt and are the preferred technology for larger batteries, typically used in electric vehicles.

No matter how you slice it, cobalt is a highly significant portion of the future battery market.

But here’s the crunch… more than 60% of world supply comes from the perennially war-torn Democratic Republic of Congo.

Thanks to serious political instability and concerns about child labor, many cobalt consumers are anxious to secure supply elsewhere.

Meanwhile, a grave supply crunch lies ahead as battery demand soars for electronics and storage, but especially for EVs in the near future.

Besides Tesla and upcoming Lucid Inc. (OTCMKTS: LCDX), there’s BMW(OTCMKTS: BMWYY), Nissan Motor Co. Ltd. (OTCMKTS: NSANY), General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F), Kia Motors Corp. (KRX: 000270), Volvo (OTCMKTS: VLVLY), Volkswagen Group (OTCMKTS: VWAGY), Audi AG (OTCMKTS: AUDVF), Mercedes (OTCMKTS: DDAIF), and a host of others who’ve announced multiple EV models in just the next few years.

Apple Inc. (NASDAQ: AAPL) happens to be one of the top cobalt users worldwide. Even just a few grams in each device adds up in a flash, so the company’s on the hunt for a direct offtake agreement from a cobalt miner.

According to the International Energy Agency, EVs worldwide will hit 125 million by 2030, up almost 4,000% from current levels.

All those new batteries to supply to EVs will require plenty of cobalt.

You can see what the hype – then subsequent EV lineup announcement from auto manufacturers – did to the cobalt price over the last two years.

Cobalt was up 320% before correcting over the last six months. I think cobalt will find strong support at current levels and start a robust gradual climb from here.

Here’s the Best Way to Play This Energy Metal

There are no pure cobalt ETFs that I know of, though this company comes the closest.

Cobalt 27 Capital Corp. (TSXV: KBLT), which also trades in the United States “over the counter” as CBLLF, is an energy metals investment vehicle.

It owns 2,905 metric tons of physical cobalt.

It’s also acquired the world’s first-producing cobalt-nickel stream on the Ramu Nickel-Cobalt Mine, as well as a cobalt stream on Vale’s Voisey’s Bay mine, starting in 2021.

But return potential doesn’t just rest on higher cobalt prices. Cobalt 27 is looking to fuel growth through its strategy of streams and royalties.

Including the two named above, the company manages a portfolio of 12 streams and royalties, including the construction-ready Dumont Nickel-Cobalt project in Quebec, as well as other exploration projects. In addition, Cobalt 27 has an interest in mineral properties containing cobalt.

The company’s focus is on streams that provide near-term cash flow. Meanwhile, these streams and royalties allow for considerable upside with limited downside exposure.

Cobalt 27 will benefit from earnings and dividends, resource growth, and expanding production.

By holding physical cobalt and owning streams and royalties, the company avoids the risks inherent in mining, like increasing capital, operating, and environmental costs.

Cobalt 27’s share price has been caught up in the sell-off suffered by commodities in general as the U.S. dollar recently enjoyed a relief rally and investors have continued flocking to regular stocks.

A closer look at recent cobalt price action suggests $25 may be the new support level.

My advice it to buy a 50% position in Cobalt 27 once its share price closes above $5.75 and then the balance once it surpasses $6.75. This should help mitigate downside risk.

Remember, cobalt supply remains tight, a situation likely to persist through 2021 at least. The fundamentals remain compelling as both China and the United States consider cobalt a strategic metal.

As EVs gain market share, cobalt will gain, and Cobalt 27 should offer plenty of leverage.

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Source: Money Morning 

Looking for viable stocks to buy at this juncture seems like a herculean task. The markets never looked convincing in October and it dubiously proved that point midweek. The Dow Jones shed 608 points exactly a week before Halloween, sending shivers down Wall Street. More problematic, at least for the nearer-term, is that the situation is likely to worsen.

Inarguably, the biggest concern is our ongoing trade war with China. Neither side obviously wants to concede, which means we’ll play hardball. Eventually, we’ll win out, but the victory will not come cheap. The other headwind impacting those seeking stocks to invest in is our political landscape. Politics is never conciliatory. However, I’ve never seen the country so divided. Anybody who has any amount of public clout has voiced their opinions to sway the electorate.

Based on everything that we’re seeing, the House will go to the Democrats. President Trump will, therefore,e face a contested government, which means nothing will get done. That might appease one side of the political spectrum, but it clouds deciphering which stocks to buy. Still, while the markets are swimming in red ink, a few viable publicly-traded companies exist. Primarily, the best “greenlight” stocks to invest in are levered toward consumer staples. That’s not surprising, considering that their underlying industry enjoys relatively consistent demand.

But other sectors have also outperformed in October, providing surprisingly healthy options for investors. Here are eight greenlight stocks to buy in a sea of red.

Hormel Foods (HRL)

Hormel Foods (NYSE:HRL) is simply one of the most monstrous stocks to buy this October. Since the start of the month, HRL stock was up nearly 7% (well, 6.66% to be exact … spooky!). While those numbers wouldn’t ordinarily raise eyebrows, consider that the Dow Jones has dropped almost 8% over the same timeframe. The venerable index is down for the year, while HRL stock has gained 17%.

Strangely, Hormel is getting a lifeline while so many other previous stocks to buy are heading towards the butcher. Revenues sharply declined last year, and HRL stock took serious damage. However, shares are on the upswing as management is back to robust growth.

Plus, Hormel has an opportunity to advantage the multi-billion dollar alternative-meat market. Hormel’s subsidiaries are exploring this sector, which should lift HRL stock long-term.

Tyson Foods (TSN)

Tyson Foods (NYSE:TSN) doesn’t quite match Hormel Foods’ performance. Year-to-date, TSN stock is down nearly 23%, which hardly inspires confidence for those looking for stocks to invest in. That said, Tyson Foods has enjoyed a surprisingly robust October. For the month, TSN stock is up over 3%. Again, this wouldn’t generate headlines except for the fact that the broader markets are in full meltdown mode. As such, TSN is a great place to park your money in this storm, especially considering its 1.94% dividend yield.

Fundamentally, the company is also coming around. Like other food companies, Tyson experienced a disjointed sales performance in recent years. However, this year, revenue is on pace to exceed 2016 and 2017 results.

Not only that, investors will likely appreciate TSN stock for the underlying company’s consistent demand. Irrespective of where the economy heads, people need to eat. When you look at the volatility in most investment sectors, Tyson Foods simply makes sense.

Hershey (HSY)

With Halloween coming up, Hershey (NYSE:HSY) seems like an appropriate choice among greenlight stocks to buy. After all, both kids and adults love Hershey’s iconic chocolates. Plus, the company levers several popular and delectable brands. Certainly, the markets are buying into the story. While the first half of this year was more than forgettable, the story changed dramatically in the second. Since the beginning of July, HSY stock has gained over 17%.

Even more impressive, the chocolatier and candy-maker increased momentum in October. Since the beginning of this month, HSY stock is up nearly 6%.

Fundamentally, I like Hershey heading into its third-quarter earnings report. The company has enjoyed three years of consecutive revenue growth, and it’s on pace for a fourth. In addition, stable free cash flow bolsters the case for HSY stock.

Oh yeah, let’s not forget about its 2.8% dividend yield. At a time when the broader markets are tanking, passive income is at a premium.

Philip Morris International (PM)

Based on the bigger picture, you’d think that Philip Morris International (NYSE:PM) has no business belonging on a list of stocks to invest in. Traditional cigarette sales are down sharply as more Americans are butting out. More importantly, the under-18 crowd isn’t picking up on the habit.

Indeed, PM stock started falling in the second half of 2017. Unfortunately for shareholders, the decline hasn’t ended. On a YTD basis, Philip Morris shares are down almost 15%.

But that statistic is deceptive because PM stock found new life since the end of August, with shares up 17%. And in October, the tobacco firm is on the verge of double-digit territory.

One of the things I like about PM stock is the underlying company’s IQOS product. IQOS, which is a type of vaporizer, plays directly into the e-cigarette craze. The advantage that Philip Morris levers is product knowledge. Not all vaporizers accurately replicate traditional smoking, which should benefit the top and bottom lines.

Finally, PM stock pays out a 5.1% dividend yield, which you definitely can’t ignore.

Verizon Communications (VZ)

With Verizon Communications (NYSE:VZ) recently putting up a convincing Q3 earnings beat, this is an easy one to put on your list of stocks to invest in. After wildly choppy trading over the past few years, VZ stock is finally on the right track. Moreover, the telco giant has completely moved against the grain in October. VZ stock is up over 8% for the month, while for the second half, shares have registered nearly 17%.

Naturally, many investors are gun shy about jumping onboard a company that is near all-time highs. However, VZ stock is the real deal. The telco firm enjoyed impressive wireless-subscription growth, while its potential for 5G is a gamechanger. The new wireless network offers multiple synergies, and Verizon was the first to deliver commercial 5G services.

Among the companies mentioned here, VZ stock provides a very generous dividend yield at 4.2%. Considering the broader selloff, Verizon provides much-needed stability and protection.

Superior Drilling Products (SDPI)

One of the biggest victims of the market selloff is the oil and energy sector. With global indices freefalling,­ Wall Street fears that demand for oil products will deflate. However, we shouldn’t ignore the fact that the U.S. has placed sanctions on Iranian oil exports, which comes into effect Nov. 4. That potentially boosts the contrarian case, not only for oil stocks, but for equipment companies, like Superior Drilling Products (NYSEAMERICAN:SDPI).

While energy firms have felt the heat, October has been (mostly) kind to SDPI stock. Despite today’s 15% decline, SDPI shares are up more than 10%. Of course, with that kind of performance, you want to be careful about going in too deeply. Still, SDPI stock has sound fundamentals. Primarily, the company has generated strong revenue growth. SDPI is on pace for an annual profit which hasn’t happened since at least 2014.

Should the supply-demand situation improve for the energy market, SDPI stock is primed for additional growth.

Iamgold (IAG)

When equities are deflating, the rule of thumb is to look at gold. So far, the precious metals sector has lived up to its reputation. Gold prices are up about 3% for October, driving up several mining companies.

However, one miner that hasn’t enjoyed much of a sentiment lift is Iamgold (NYSE:IAG). This month, IAG stock is up nearly 2%. That’s not bad in and of itself, considering the panic-selling on the Street. That said, Iamgold’s competitors have seen robust double-digit growth.

Due to the fact that the broader markets continue to flash all kinds of ugly, I believe Iamgold will eventually rise along with its peers. Fundamentally, IAG stock levers impressive stats. It’s one of the few gold companies that have registered consecutive years of growth. Moreover, Iamgold’s cash flow has stabilized relative to earlier years’ dysfunctionality.

Rosetta Stone (RST)

Back in July, I pegged Rosetta Stone (NYSE:RST) as one of the long-term stocks to buy. I felt that the company offered a compelling service, which is to get people up-to-speed on learning a foreign language. While we’re incredibly blessed to live in the world’s top superpower, and that English is the international language, that status isn’t likely to hold indefinitely.

For one thing, changing demographics have pushed Chinese as the world’s most spoken language. In theory, this and other factors should boost RST stock.

What I didn’t expect was for Rosetta Stone to hold its own during the October selloff. Yes, RST stock did experience volatility when the major indices tanked. However, RST is back to level ground, which gives me confidence in the company’s “bigger picture” potential.

As of this writing, Josh Enomoto is long gold bullion.

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