These are seven of the hottest lithium stocks every investor should own
- Considering demand is greater than supply, these seven lithium stocks should be at the top of your buy list.
- Lithium Americas (LAC): This eventual lithium giant wants to split into two companies.
- Global X Lithium & Battery Tech ETF (LIT): Lithium exchange-traded funds are a great way to diversify.
- Amplify Lithium & Battery Technology ETF (BATT): This ETF provides another solid way to invest in lithium.
- Standard Lithium (SLI): SLI is currently working on the red-hot Lanxess Project in Arkansas.
- Livent Corp. (LTHM); Analysts have been busy raising their price targets on LTHM.
- Albemarle (ALB): It’s hard not to like this lithium giant, with a dividend to boot.
- Piedmont Lithium (PLL): Analysts just initiated a buy rating, with a $108 price target.
Lithium is crucial for the green energy boom. The only problem is that there’s more demand than there is supply, which isn’t likely to balance out any time soon. That alone should put these seven no-brainer lithium stocks at the top of your buy list. In fact, to keep up with demand, every existing producer supplying the market today must double output every two to three years for the next decade, Eric Norris, president of Albemarle (NYSE:ALB) said. “No producer has been able to do that reliably to date.”
We also have to consider that lithium is in short supply because the industry has been asleep for years. Then, all of a sudden, everyone needs it for the green energy boom, and we have to go dig it up. Unfortunately, companies just can’t bring it to the surface fast enough. That being said, here are seven of the top no-brainer lithium stocks all investors should own.
|LIT||Global X Lithium & Battery ETF||$69.51|
|BATT||Amplify Lithium & Battery ETF||$12.86|
Lithium Americas (LAC)
One of the top no-brainer lithium stocks to buy is Lithium Americas (NYSE:LAC), which just rebounded from a low of about $21 to $25.85. From here, I’d like to see it refill its bearish gap around $31.
Just recently, the company announced plans to split into two lithium companies. The first would be an Argentina-focused lithium company, which would own interest in its Argentine lithium assets, including the near-production Caucharí Olaroz lithium brine project in Jujuy, Argentina. The other would own the Thacker Pass lithium project in Humboldt County, Nevada, and the company’s North American investments.
Even better, the company, as it stands now, is moving Thacker Pass towards production and has received all federal and state permits needed to commence construction, with a ruling on the Record of Decision appeal expected in early 2023. With regards to Caucharí-Olaroz, the goal is to bring Stage 1 operations of 40,000 tonnes per annum to production by the new year 2023.
Global X Lithium & Battery Tech ETF (LIT)
One of my favorite ways to trade any hot sector is with an exchange-traded fund, such as the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT). Not only does this ETF offer great diversification, but it also does so at a lower cost. At $69.51 per share, and with an expense ratio of 0.75%, the LIT ETF offers exposure to stocks, such as Albemarle, BYD (OTCMKTS:BYDDY), LG Chem (OTCMKTS:LGCLF), Tesla (NASDAQ:TSLA), Livent (NYSE:LTHM), Lithium Americas (NYSE:LAC), Quantumscape (NYSE:QS) and Piedmont Lithium (NASDAQ:PLL) to name a few.
After slipping from about $82 back to a current price of $69.51, I’d like to see the LIT ETF eventually retest $79 in the near term.
Amplify Lithium & Battery Technology ETF (BATT)
Another one of the top no-brainer lithium stocks to consider is the Amplify Advanced Lithium & Battery Technology ETF (NYSEARCA:BATT).
At $12.86, with an expense ratio of 0.59%, BATT offers exposure to companies involved in battery storage, battery metals and materials, and electric vehicles. Some of its top holdings include Tesla, Glencore PLC (OTCMKTS:GLNCY), Nio (NYSE:NIO), Li Auto (NASDAQ:LI) and LG Chem. Since August, the ETF slipped from about $16.25 to about $12. From here, I’d like to eventually see the BATT ETF retest $16 again, near-term.
Standard Lithium (SLI)
Standard Lithium (NYSEMKT:SLI) is another hot opportunity at current prices. After falling from about $6.75 to $3, the stock has since rallied back to about $3.81. From here, I’d like to see the SLI stock rally back to $6, near-term.
This rally is being helped by the United States Patent and Trademark Office, which issued Notices of Allowance for Standard Lithium’s first two U.S. patent applications. This will allow it to continue to advance its first commercial lithium extraction project. In addition, the company is working on a 3.14-tonne LCE (Lithium Carbonate Equivalent) Indicated Resource, a 150,000-acre joint venture with Lanxess in Arkansas.
“The region is home to North America’s largest brine production fairway with over five decades of commercial production, significant infrastructure, abundant low-cost electricity, and access to chemical reagents and water sources. The project is already permitted for extensive brine extraction and processing activities,” the company said.
Livent Corp. (LTHM)
Another red-hot no-brainer lithium stock to buy is Livent. Right now, the company has 17 offices or manufacturing facilities across the world — including its “largest and most diverse manufacturing facility” in North Carolina. It will also soon start phase two of its carbonate capacity expansion in Argentina, with commercial production expected to begin by 2023.
Earnings continue to impress. In fact, in its third quarter, revenue was up 124% year-over-year to $231.6 million. GAAP net income was $77.6 million, which was 29% higher quarter over quarter. Adjusted EBITDA was $110.8 million, which was seven times greater than year-earlier numbers. Even better, analysts love the LTHM stock.
B. Riley analysts, for example, initiated coverage with a neutral rating, with a $32 price target. JPMorgan initiated coverage with a neutral rating, with a price target of $28. Citi analysts just raised their price target to $31 from $27. Deutsche Bank raised its target to $30 from $27.
The lithium boom has also been a gold mine opportunity for Albemarle, which is developing lithium projects all over the world, including the U.S., Chile, Brazil, Germany, China, Japan, Taiwan and Australia. Subsequently, earnings and growth for ALB are off the charts. The company’s revenue soared 152% to $2.1 billion. Net income came in at $897 million, or $7.61 per diluted share. Adjusted EBITDA of $1.1 billion was up 447%.
The company then raised guidance and expects to be cash flow positive this year. It also declared a quarterly dividend of $0.395 per share. The dividend, which has an annualized rate of $1.58, is payable on Jan. 3, 2023 to shareholders of record at the close of business as of Dec. 16, 2022. Analysts at Bank of America recently raised their ALB price target to $332 from $262, as well.
Piedmont Lithium (PLL)
With projects in the U.S., Quebec and Ghana, Piedmont Lithium’s “location in the renowned Carolina Tin Spodumene Belt of North Carolina, the cradle of the lithium industry, positions [it] to be one of the world’s lowest-cost producers of lithium hydroxide, and the most strategically located to serve the fast-growing US electric vehicle supply chain,” as noted on the company’s site.
The company was even selected for a $141.7 million grant from the U.S. Department of Energy, one of the “first set of projects funded by the President’s Bipartisan Infrastructure Law to expand domestic manufacturing of batteries for EVs and the electrical grid and for materials and components currently imported from other countries”. B. Riley analysts just initiated coverage of the PLL stock with a buy rating, with a $108 price target.
This post originally appeared at InvestorPlace.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.