Best Lithium Stocks To Buy Now
The future is being powered by lithium, a metal that is the key ingredient for making lightweight, power-dense batteries. Electric vehicles (EVs) depend on lithium batteries and EV sales are seeing massive annual growth, and analysts expect global EV sales to increase 57% in 2022 on a year-over-year basis.
best lithium stocks to buy now
Thanks to the rapidly climbing demand for EV batteries, lithium metal prices have gone through the roof. The price of lithium has quadrupled in the 12 months to September 2022 and would be even higher if the U.S. dollar had not soared in value.
There are a limited number of public companies that mine and refine lithium, plus a host of smaller startup operations that are in the early exploration or development stages of their resources. Forbes Advisor has identified eight lithium stocks that are worth looking at, including both more speculative startup names for well-established mining companies.
The company anticipates that lithium mining and refining operations will begin in Quebec in 2023 and Ghana in 2024, followed by Tennessee in 2025 and North Carolina in 2026. But some of these projections depend on tough local and national permitting reviews.
The list above encompasses all of the main public companies in the lithium space. There is a very limited roster of companies active in mining, processing, and refining lithium. Others not listed are either very small, have witnessed major stock price declines, or are in major financial distress.
The eight stocks are ranked in order based on one-year sales growth, although that is not necessarily an indication of future growth prospects. The top of the listing includes companies with reported revenue and earnings, while the three final stocks on the list are companies that are closing in on profitability and sales growth.
None of the stocks on our list have been able to sustain EPS and sales growth for more than five years. Lithium is a highly cyclical industry, so sales and earnings figures tend to be volatile instead of demonstrating steady growth.
Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
Another decision is whether you want to invest in companies focused on the production of lithium itself, like lithium mining stocks, or companies that process lithium or manufacture products, like lithium battery makers and lithium recycling stocks.
A well-diversified portfolio would have a mix of different types of lithium investments. If you need help putting this together, consult with a financial advisor for their advice on which lithium stocks to buy.
Cory has been a professional trader since 2005, and holds a Chartered Market Technician (CMT) designation. He has been widely published, writing for Technical Analysis of Stock & Commodities magazine, Investopedia, Benzinga, and others. He runs TradeThatSwing.com, has authored several trading courses and books, coaches individual clients, and regularly trades stocks, currencies, and ETFs.
In this article, we will look at the 12 best lithium and battery stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Lithium And Battery Stocks To Buy Now.
As car manufacturers continue to pour hefty investments into battery technology to cut production costs and make their products more accessible to consumers, lithium and battery stocks are well-positioned to soar. The global lithium market is on track to reach a value of $22.6 billion by 2030, according to ReportLinker, and the global EV battery market is expected to be worth $84.5 billion by 2030.
With growing EV sales and increasing competition among manufacturers to cut EV prices, lithium and battery stocks are becoming attractive investment options. Some of the top lithium and battery stocks that are popular among elite money managers include Sociedad Quimica y Minera (NYSE:SQM), FREYR Battery (NYSE:FREY), Albemarle Corporation (NYSE:ALB). Let's now discuss these stocks, among others, in detail below.
To determine the best lithium and battery stocks to buy now, we sifted through lithium and battery ETFs and compiled a list of pure-play EV battery and lithium stocks. We narrowed down our selection to stocks that were the most popular among hedge funds. We have ranked these stocks in ascending order of the number of hedge funds that have stakes in them.
Piedmont Lithium Inc. (NASDAQ:PLL) is involved in the exploration and development of lithium projects in the United States. The company is developing 4 lithium projects currently in North Carolina, Tennessee, Ghana, and Quebec, and is on track to become one of the largest lithium hydroxide producers in the United States.
This March, Macquarie analyst Hayden Bairstow started coverage of Piedmont Lithium Inc. (NASDAQ:PLL) with an Outperform rating and a $140 price target. As of March 9, the stock has gained 32.44% year to date and is one of the best lithium and battery stocks to buy now.
Sigma Lithium Corporation (NASDAQ:SGML) is another leading lithium mining company, based in Brazil. At the end of the fourth quarter of 2022, 11 hedge funds were long Sigma Lithium Corporation (NASDAQ:SGML) and disclosed positions worth $54.9 million in the company. This is compared to 8 hedge funds in the preceding quarter with stakes worth $45.5 million. The hedge fund sentiment for the stock is positive.
As of March 9, Sigma Lithium Corporation (NASDAQ:SGML) has gained 208.52% over the past 12 months. Sigma Lithium Corporation (NASDAQ:SGML) is ranked among the best lithium and battery stocks to buy now.
At the close of the fourth quarter of 2022, Microvast Holdings, Inc. (NASDAQ:MVST) was held by 12 hedge funds. These funds held collective positions worth $24.7 million in the company. This is compared to 11 hedge funds in the previous quarter with stakes worth $24.1 million. Microvast Holdings, Inc. (NASDAQ:MVST) is one of the best battery stocks to buy now according to hedge funds.
In addition to automakers Tesla Inc. (NASDAQ:TSLA) and Ford Motor Company (NYSE:F), battery stocks such as Microvast Holdings, Inc. (NASDAQ:MVST) are also well-positioned to capitalize on the growth trends of the EV industry.
Lithium Americas Corp. (NYSE:LAC) is a lithium mining company with operations in the United States and Argentina. On March 2, Lithium Americas Corp. (NYSE:LAC) began construction at its Thacker Pass lithium project in Nevada. As of March 9, the stock has gained 21.70% year to date.
On March 8, PI Financial analyst Justin Stevens took coverage of Lithium Americas Corp. (NYSE:LAC) with a Buy rating and a C$40 price target. Stevens noted that the company is offering an attractive opportunity" to investors looking for investing in domestic production of battery-grade lithium.
At the end of Q4 2022, 14 hedge funds were bullish on Lithium Americas Corp. (NYSE:LAC) and held collective stakes worth $120.8 million in the company. The stock is placed ninth among the best lithium and battery stocks to buy according to hedge funds.
EnerSys (NYSE:ENS) is a leading American battery manufacturing and energy solutions company, headquartered in Pennsylvania. On February 8, the company posted earnings for the fiscal third quarter of 2023. The company reported an EPS of $1.27 and outperformed EPS estimates by $0.04. The company's revenue for the quarter amounted to $920.20 million. EnerSys (NYSE:ENS) is one of the best lithium and battery stocks to buy now and has gained 30.82% over the past 6 months.
Solid Power, Inc. (NASDAQ:SLDP) is involved in the development and manufacturing of solid state battery technologies for electric vehicles. At the end of the fourth quarter of 2022, Solid Power, Inc. (NASDAQ:SLDP) was spotted on 18 hedge funds' portfolios that disclosed collective positions worth $11.5 million in the company. The stock is placed seventh on our list of the best lithium and battery stocks to buy now according to hedge funds.
QuantumScape Corporation (NYSE:QS) is an emerging and innovative battery manufacturing company, based in California. The company is involved in the development and commercialization of solid state lithium metal batteries for electric vehicles. As of March 9, the stock has returned 35.56% to investors year to date. QuantumScape Corporation (NYSE:QS) is one of the best lithium and battery stocks to buy according to hedge funds.
Some of the most widely-held lithium and battery stocks by elite money managers include QuantumScape Corporation (NYSE:QS), Sociedad Quimica y Minera (NYSE:SQM), FREYR Battery (NYSE:FREY), and Albemarle Corporation (NYSE:ALB).
Investors are seeking out the best lithium stocks as the rise in electric vehicle (EV) adoption fuels demand for lithium. This has led to rising prices for metal as supply remains tight and demand is increasing. Around 57% of the world's lithium deposits are in countries like Argentina, Bolivia and Chile.
Adding to the bullish case for lithium stocks is the Inflation Reduction Act (IRA). The bill was signed into law last August, and over the following three months, more than $13 billion worth of investments toward the production of battery raw material and EV manufacturing were announced, according to a Bloomberg News report (opens in new tab).
Additionally, lithium prices have jumped ninefold in the past three years, according to a Benchmark Mineral Intelligence (opens in new tab) report. And in the past year, they have more than doubled. As for where they're headed this year, analysts differ on the subject.
While Goldman Sachs and Morgan Stanley expect that lithium prices could slow down in 2023, UBS analyst Lachlan Shaw thinks that China's reopening after a spurt of COVID-19 cases could trigger a spurt in sales of electric cars in China. The analyst expects EV sales in China to go up by 30% to 35% this year.
"We believe lithium markets will remain in deficit for the near and medium term before moving into structural deficit long-term," says Shaw. "This needs a demand rationing price, for which we have seen no evidence in the past 12 months, despite record-high prices that are orders of magnitude above costs. Gaining conviction on a price that rations demand is hard given the speed of the secular transformation in lithium fundamentals under way." 041b061a72