From $40 to $400? How This "Magic Materials" Stock Could Pull It Off

When I was old enough for my Dad and I to start building plastic models together, one of our first projects was the SR-71 Blackbird — a supersonic spy plane built by the famed Lockheed Skunk Works that gave America crucial intelligence during the Cold War.

With a top speed of Mach 3.3 and a service ceiling of 85,000 feet, the black jet used speed, stealth and altitude as its main defenses on missions that took it directly over Vietnam, North Korea, Libya and other Middle Eastern targets — and along the edges of China and the Soviet Union.

Despite being fired on more than 4,000 times across 3,500 missions, not a single Blackbird was lost to enemy fire. The jets flew from the mid-1960s until they were retired in 1989. But the jet was brought back in the mid-1990s after the Gulf War and big changes in North Korea exposed big gaps in U.S. spy satellite coverage. It was finally retired again in 1998 — this time, for good.

Nearly 30 years later it still holds speed and altitude records for manned, air-breathing aircraft. Two pretty cool ones: A jaunt from Los Angeles to Washington, D.C. (one hour, four minutes, 20 seconds) and another from New York to London (one hour, 54 minutes, 56 seconds).

Those records aren’t the SR-71’s only legacy. Or even its biggest.

One of the secrets of the jet’s success was its widespread use of titanium, which comprised 85% of the jet’s structure (the rest was polymer composites).

Titanium is a “magic material.” Because it is just as strong as steel — but 40% lighter — titanium was a great choice for an airplane like the Blackbird. It also handles heat well, is highly resistant to corrosion and is non-toxic.

Air friction from the Blackbird’s Mach 3 flying speeds generated surface temperatures of more than 1,000 degrees — which would cause other metals to fail. Lockheed found that titanium alloy, which softened at lower temperatures, could be machined more easily — as long as it was protected from corrosive materials. Fuselage panels were machined to fit loosely when the aircraft was on the ground — which caused the Blackbird to leak JP-7 fuel on the ground before takeoff. Thanks to “thermal expansion,” those joints would tighten up at speed.

The SR-71 changed the narrative on titanium — creating a refining, manufacturing and supply-chain blueprint for a material that was “discovered” in 1791, first purified in 1910 and first industrialized in 1948.

For instance, Lockheed found that when you washed welded titanium, you had to use distilled water, since the chlorine in tap water was found to be corrosive. Similarly, the company discovered that cadmium-plated tools had to be discarded – since they, too, caused corrosion. Metallurgical contamination was another issue: At one point, 80% of the titanium delivered to Lockheed for Blackbird production was rejected for just this reason.

It was a harbinger of the challenges to come: The Soviet Union was the world’s top titanium supplier – America lacked domestic sources of titanium dioxide — so the Central Intelligence Agency created “shell companies” to surreptitiously obtain the metal from its enemy.

Talk about ironies: The United States built a plane to spy on the Soviet Union, using metal the Soviet Union provided.

That brings us to present-day America and the “Titanium Challenge” we face. Thanks, in part, to the SR-71, titanium is widely used in the defense/aerospace, medical and high-tech sectors, it’s become what economists and policymakers refer to as a “Critical Material” — like the “Rare Earth Elements” (REEs) you’ve likely been reading a lot about recently.

Like it does with REEs, America has a massive-and-growing need for titanium. And like with REEs, the big sources of titanium are outside U.S. borders — in areas controlled by our enemies: Russia and China.

In a report awhile back, Stars & Stripes wrote that “titanium is the next Cold War battle — and the United States is already losing it.”

There’s a possible answer — and an opportunity that goes with it.

I’ll talk about both today — with details on the tiny company that’s part of the solution. It’s a company I’ve talked about several times here recently.

It’s publicly traded — meaning you can buy the stock right now. And it’s a stock that could deliver a 10x gain between now and 2030.

So let’s talk …

Can’t Get Enough 

Since the days of the Blackbird, titanium demand has zoomed in areas like:

• Aerospace/Defense: Airframes, jet engines, landing gear, armor plating, spacecraft structures and submarine hulls.

• Medical: Biocompatible implants, surgical tools and dental prosthetics.

• Automotive: Valves, crankshafts, suspension components.

• Consumer Goods: Golf clubs, bicycles, camping gear and cookware.

• Consumer Electronics: Smartphones, laptops and eyeglass frames.

• Architecture and Marine: Corrosion-resistant cladding and ship components.

• Industrial and Processing: Heat-exchangers, reactor vessels, desalination plants, pipelines and valves and offshore oil rigs.

• New Era Energy: Offshore wind turbines, solar-panel frames and hydrogen fuel cells.

• Luxury Goods: Watches, jewelry and value-elevation for high-end products.

To flesh this out a bit, consider that every 787 Dreamliner passenger jet built by The Boeing Co. $BA ( ▼ 0.73% ) uses about 50 tons of titanium. And it builds six to seven of those modern jets a month. With airline passenger numbers growing again in the post-COVID-19 era (global passenger traffic will traverse 10 billion this year), there will be plenty of Dreamliner buyers long-term. Analysts are now saying they see a “modern-inflection point” for titanium, thanks to something called “additive manufacturing” – essentially the next generation of 3D printing, where tight standards, just-in-time production and a minimum of waste will create precision products with a minimum of energy use, cost and waste.

The global titanium market will grow from about $26.5 billion in 2023 to $39.2 billion in 2030, a compound annual growth rate of 6.8%, says analytics firm VynZ Research.

And that may be understated.

We talk about “finding the best storylines” to find great investments. That’s, in part, because those storylines also help drive demand across markets, sectors and economies.

And when multiple storylines intersect, that demand growth can be downright powerful. And that’s what we have here. We’ve got major intersecting storylines like the New Cold War, Deglobalization, the AI Era and the Commodities Supply Shortfall — all of which will drive titanium demand.

And there are “sub-storylines” like the New Golden Age of Aviation, Drones, Hypersonics, the Commercialization of Space and the Reshoring of America, which will add some “oomph” to titanium demand.

Here’s where it gets tricky.

In one of those déjà vu moments harkening back to the invention of the Blackbird way back in the Cold War, America again sees growing demand for a material whose main suppliers are this country’s enemies.

That needs to change …

“X” Marks the Spot

If “titanium sponge” is the precursor and titanium metal is the finished product, America faces a “titanium deficit” because it pretty much dropped out of the “sponge” market a few years back.

China, Russia and Japan ramped up production and flooded the market with low-cost product – meaning U.S. producers couldn’t compete. China and Russia together account for about 70% of the global titanium market.

Japan provides 90% of the titanium sponge America imports. But Japanese suppliers are maxed out, meaning the United States will have to find other solutions.

There are answers. That additive manufacturing will help companies waste less of the metal. Diversifying our suppliers — and sourcing from countries like Ukraine, Australia and Mozambique will help, too.

But “reshoring” production and doing more recycling could prove crucial.

And the U.S. company I’m interested in does both.

It’s called IperionX Ltd. $IPX ( ▲ 2.93% ). It’s based in Charlotte. And it’s one of my favorite “Commodities Supply Shortfall” stocks.

Iperion owns the Titan Project, a Tennessee mine that produces titanium, zircon, high-grade silica and other critical materials. The company is developing low-carbon, fully recyclable titanium technologies. And its Titanium Production Facility (TPF) at the Virginia Titanium Manufacturing Campus will be key to this.

Iperion’s 100% ownership of its reserves gives it control over supply. The stock has already surged from $30 a share to $38 — a 26% jump — since I told you about it in my second-half forecast report back on July 3.

It’s got true high-risk/high-potential — meaning it’s a stock that could jump five or 10 times from here if everything goes well.

Let’s assume we see continued demand from aerospace/defense, EVs, 3D printing, energy and medical — as well as the 3D printing revolution. Along with that, iPerionX fully commercializes its titanium recycling and production processes. And it continues to build its Titan Project in Tennessee.

As Wealth Builders, we look to hold stocks for three, five, seven years — or more. So let’s look at what IperionX might do over the that stretch:

• Three-Year Forecast (2028): Revenue could grow from $2.67 million this year to $224 million in 2027 and $290 million by 2028. The consensus right now is for the company to hit breakeven in 2026. Earnings will turn positive (earnings per share of 20 cents) in 2027 and 35 cents a share in 2028. Return on equity (ROE) is projected to hit 48% in three years.

• Seven-Year Forecast (2032): Revenue is starting from a very low level. If it could grow 75% a year between now and 2032, Iperion could be a $1 billion (top line) firm by 2032. Assuming a conservative price/sales (P/S) ratio of 5.0, you’re talking about a market value of $5 billion – nearly seven times the current market cap of $750 million.

So now that you’ve seen how I’m thinking, let’s rough out a simple model to show you how this could play out …

Here’s a point I keep making here: Modeling anything this far out with precision is super tough to do. Here I’m trying to present scenarios — and illustrate the magnitude potential.

The company is on a journey. And there are plenty of risks to consider as it travels toward that commercial milestone.

First and foremost (as the timeline chart here shows), IperionX is a “development-stage” venture — meaning it’s one that’s still building out its core technologies, infrastructure and marketing. But it’s transitioning to a commercial venture, albeit one just starting to scale up.

So you face:

• Execution Risk: Scaling up titanium production will take (lots of) money and the processes will have to be proven.

• Regulatory and Geopolitical Risk: In an era of Deglobalization – in the face of the New Cold War – uncertainty is the only uncertainty. Domestically, down in Washington, we’ve been seeing a lot of political whipsawing – which we expect to continue. Over our five-to-seven-year time frame, there’s a lot of opportunity for “wild cards.”

• Economic-Cycle Risk: Uncertainty here, too, is a product of the longer time frame we’re looking at. The ebbs and flows of the economy can impact intermediate-term demand.

• Stock-Market-Volatility Risk: Here I’m not just talking about the overall market moving up or down. I’m also referring to sectors that can move in and out of favor with investors. At any one point, folks could be hyper bullish on the materials sector — or hyper bearish. But, as with the economy, we’re talking about a “point-in-time” sentiment. That’s why we play the long game.

The bottom line: There is risk; but IperionX is a stock that offers “multi-bagger” potential over the next five years to seven years.

If that appeals to your Wealth Builder nature, consider using our “Accumulate” strategy. Buy a foundational stake here. And look to add more shares at different pullback levels. Follow the company carefully. And play the long game.

I will stay on top of this one.

See you next time;