Top Lithium Stocks

Jul 20, 2022 03:07 PM ET
Top Lithium Stocks

With the global uncertainty in economics and geopolitics affecting the oil prices, the overall demand for electric vehicles may increase in the next 3-5 years. The transition in energy consumption is undoubtedly overwhelming the need for raw products to produce electrical products. Investors on wall street and big financial institutions keep a clean eye on the relevant stocks for capitalizing on the long and short sides.

Lithium is the key component of all the rechargeable batteries used in cell phones, electric vehicles, etc. The increasing demand for the metal has certainly caused an uprise in its value which reached an all-time high of 500000 in March 2022. 

What is lithium?

Whats lithium? Lithium is a metal that was first discovered in 1817. It is the lightest metal on earth and the most reactive. Lithium can be mined from several places, but it is most commonly found in salt flats or brine pools.

Lithium is alkaline in nature and is used in creating the Li-ion battery. The high charge/discharge efficiency of 80-90% and the long cycle durability makes it the optimal option for use in electrical components. In contrast with lead-acid batteries, lithium-ion can, in some instances, last for more than five years. 

What is lithium battery?. A typical lithium battery consists of an anode, cathode, and electrolyte. The fluid is responsible for shifting positively charged lithium ions from the anode to the cathode. Regulations are in place while transporting large quantities of lithium to avoid incidents.

Where and how is lithium mined?

Lithium mining is a process of extracting lithium from the ground. On a peak scale, almost all of the lithium is mined from Australia, Latin America, and China. The big companies set up their own mining farms rather than purchasing it from a third-party source. 

The process can take anywhere between 2-6 months before enough lithium can be extracted to be commercially viable. Most rigs are set up far from cities to avoid polluting the general living environment. 

What is lithium used for?

Lithium finds its uses in two major fields:

  • Medicine. Lithium and its compounds are involved in the production of psychiatric drugs. It may take some time for the treatment to regulate your mood fully.

  • Batteries. As mentioned before, lithium is widely used in rechargeable batteries. Our cell phones, EVs, cameras, etc., are all powered via Li.

Lithium may also find its implementation in industries where it acts as a flux addition for iron and manufacturing ceramics.

Importance of lithium stocks

The stock value of companies operating in lithium can fluctuate depending on the supply and demand. Geological conditions may halt the mining of lithium and therefore impact the sales. The sudden changes promote volatility in the stock, which investors readily capitalize on. They can buy and hold the metal or short it depends on the market conditions. 

How to buy lithium stocks?

Traders can easily get cheap lithium stocks price by signing up with a stockbroker. Brokers provide a link between investors and exchanges and, in return, charge a small trading fee. To get your feet wet it may be possible to test out the platform and the services by using a demo account. 

Before registration, it is vital to see if the company is offering services to the residents of your area and comes under examination of regulators.  

How much do lithium stocks cost?

The value of various stock companies can differ considerably depending on their market cap, earnings, debt to equity ratio, free cash flow, etc. The top companies, such as Albemarle, have their stock value at around $200. Some cheap stocks can vary between $10-$50, which is the case with Lithium America. 

Will lithium prices go up?

The rise and fall of lithium can vary according to supply and demand. As the demand for metal goes up in the upcoming years due to the increasing need for EVs and rechargeable electronics, it may experience an upward curve in price. 

As Australia, Latin America, and China has the largest lithium deposits in the world, the export capabilities of these nations may also affect the price. 

Things to consider before investing in lithium stocks

Before investing in any financial instrument, it is vital to prepare a solid game plan. Your strategy should include solid risk management, a detailed analysis, solid mindset, to name a few things. Let us go through each point in detail to get a broad view of stock investments.

Make a research

Knowledge is power is a strong proverb that holds true regarding stock trading. Before investing in any top lithium stock, create a detailed list of all the mining companies. Research their number of employees, the total sales, market value, and any essential points that can help establish a buy/sell bias.

Trading strategy

Create a solid strategy depending on your personality. If you don't like waiting for long terms, then scalping is the way to go. As a scalper, it would be better to analyze price action charts on lower time frames. Swing traders can use fundamentals as they have a long-term effect.

Manage your trading risks

Risk management is a solid component of any trading strategy. Over leveraging your positions may result in big gains; however, the risks are also high. 

Diversification

Putting your eggs in different baskets is a sure way to diversify your risk and portfolio. If a company goes bankrupt, you don't risk losing your entire capital as it was distributed amongst various companies.

Determine position size

Top traders recommend risking no more than 1% on any given trade. Using leverage can allow you to trade with bigger lot sizes; however, keep in mind that rewards are proportional to the risks.

 

Benefits of lithium batteries

We can sum up the benefits of lithium batteries as follows:

  • Lightweight and safe to use

  • They can last for a long period while maintaining the efficiency

  • Quick recharging times

  • There is no need for any maintenance

  • It has the highest energy density compared with other rechargeable options

Drawbacks of lithium batteries

While the drawbacks are:

  • A bit costly 

  • They are sensitive to high temperatures

Best lithium stocks to consider

 

 

Name

Market Cap

Key Points

Pros

Cons

Albemarle

$22.93B

  • Over 100% increase in net income

  • Supplies Panasonic with batteries

  • Minimal long-term debt

  • Leading global supplier

  • Over 6000 employes

  • Fortune 500 company

  • Major plants located in America only

Lithium Americas 

$3.57B

  • Potential future partnership with Tesla

  • Advanced lithium mining projects underway

  • Established in 2007

  • Huge chance for future growth as production starts

  • Big plans to provide produce Li-ion batteries

  • The company is not generating any revenue as of now

Piedmont Lithium

$

899.47M

  • Mining start-up company

  • Potential increased cooperation with Tesla

  • Positive economic impact study

  • Aims at net-zero emissions

  • Multiple mining locations worldwide

  • Supply deal with Tesla

  • Government permit troubles

Livent

$3.73B

  • Increased net income of 6750% Y/Y

  • Multiple manufacturing facilities

  • Serves energy, aerospace, and medicine sector

  • Global lithium manufacturer

  • Constant expansion of products

  • Promotes green energy

  • Frequent ups and downs in stock price

Pilbara Minerals

$7.03B

  • Owned by institutions, hedge funds, general community, etc

  • Growing relationships with the local community

  • Largest hard rock lithium mining lithium mining company stocks

  • Promotes green energy

  • Aims to provide long-term investment solutions

  • Potentially low intrinsic value

  • Poor performance for the past six months

Ganfeng Lithium

$218.83B HKD

  • 3-year contract with Tesla

  • Development of additional mining drills

  • Headquartered in China

  • Increasing sales for the last 3 years

  • Hosts a sizeable Chinese population

  • The stock is believed to be overvalued

Sayona Mining

$1.07B

  • Partnership with Piedmont Lithium

  • Based in Western Australia and Quebec Canada

  • Huge returns over the last five years

  • The reduction in stock price might be a good buy

  • Most traded stock in the market

  • Penny stocks can be subjected to huge swings

Sigma Lithium 

$1.89B

  • Net-zero carbon emission by 2023

  • Environmentally Sustainable Processing Plant

  • Environmental license update

  • Unrestricted trade in Brazil

  • On track for delivering sustainable lithium product

  • Positive regulatory news

  • No earnings as of now

Core Lithium

$1.52B

  • The next best name in Australias' lithium miners

  • Close contact with logistics and power supply

  • Ready for production at the end of 2022

  • Nearly 400% growth in stock till May 2022

  • Enroute to establish setup in Australias highest quality mineral resource 

  • The stock dipped significantly in June 2022

Sociedad Quimica y Minera 

$21.97B

  • Operates in lithium and iodine derivates

  • ISO39001 road safety

  • World leader in sustainability

  • High liquidity 

  • Total revenue of $2.86 billion as of 2021

  • Shares are a bit costly

Frontier Lithium 

$351.52 M

  • Quality lithium source

  • Full ownership of PAK Lithium Project

  • The project covers 65 kilometers of Ontario's Electric Avenue

  • The management owns 25% of the shares

  • Over 50% yearly change

  • No revenue as of now

Global Lithium

$211.188M

  • 60,000m reverse circulation (RC) drilling program ongoing

  • One of the fastest-growing lithium explorer

  • Completed acquiring 80% of Manna Lithium project

  • Positive report from Manna drilling

  • Establishment of long-term mutual benefits with community members

  • Stays true to governance standards

  •  

Lithium Energi Exploration

$18.53M

  • New drilling has begun in the triangle joint venture

  • Headquartered in Toronto with offices in Texas, Catamarca, and Argentina

  • Penny stock to watch in future

  • A low value can allow small-cap investors

  • First drilling underway

  • Over 50% yearly return from 2021 till 2022

  • Low market cap

 

Albemarle

Albemarle

Albemarle specializes in lithium, bromine, and catalyst refinements. Founded in 1991, the company produces batteries for most electrical equipment, netting over $10 billion in net assets. They are based in America, Chile, and Australia and are focused on providing batteries to over 90 countries worldwide. 

Albemarle is constantly investing in research and development to produce more efficient lithium batteries. The cooperation is looking to increase the domestic production of batteries to meet the ongoing demands of automakers. 

Lithium Americas 

Lithium Americas

Young company that is working on two projects which are under development. The first one is based in Thacker Pass, Nevada, while the other is in Argentina. The project is targeting 400000 tpa lithium carbonate capacity in the initial run. 

Lithium Americas is not generating any revenue and has over a billion dollars raised in debt and equity. After completing its lithium generation sites, the company could see a huge increase in its overall value. It could end up partnering with Tesla for a long-term lithium agreement. 

Piedmont Lithium

Piedmont Lithium

Piedmont Lithium has seen a fair share of ups and downs in the post-pandemic era. The company is having trouble opening up its mine in North Carolina as officials are concerned about environmental issues. If they manage to achieve a license and resume operations, the stock price could see proper growth. 

The North Carolina mining holds value as it has halted the current supply of shipments to Tesla. On the positive side, the company states that its total output by 2027 could stand at $350 million+. 

Livent

Livent

For much of 2022, Livent has been ranging between $20 and $40 on the New York stock exchange. The company is responsible for selling lithium batteries, polymers, and pharmaceuticals produced from manufacturing facilities in North America, South America, Europe, and Asia. 

The overall data from the company shows over 50% gain on year to year basis. Hedge funds are also bullish on the stock, which has a net profit margin of 4360.92%. BlackRock Fund Advisors is the company's largest shareholder, with 14.72% in stake.

Pilbara Minerals

Pilbara Minerals

Pilbara Minerals has been operating since 2005 and is aiming to achieve long-term efficiency in its lithium products. The Pilgangoora project, located 120 km from Port Hedland in Australia, is responsible for working on one of the largest hard rock lithium deposits. 

Most of the stock is owned by institutions that aim to capitalize on its low intrinsic value. Being a penny stock, it is also a favorite option for the general public in terms of investment. The mixed investments can trigger a significant sell-off or buy at any moment.

Ganfeng Lithium

Ganfeng Lithium

Ganfeng takes its place as the biggest lithium miner in China. The company caters to the EV needs of 1.4 billion people in China and also supplies materials to the United States. Lithium is mined from Australia and then refined and processed to produce batteries. Old batteries are also used for recycling purposes. 

Traders can buy the GNENF stock on the Hong Kong and Shenzhen stock exchanges. US traders can speculate it on the OTC markets. Ganfeng has also signed a 3-year contract with the US EV maker Tesla. As the demand for electric vehicles increases, the overall outlook is undoubtedly bullish.

Sayona Mining

Sayona Mining

Listed on ASX and SYAXF, Sayona Mining is one of the emerging lithium producers in Australia. The company is rapidly acquiring stakes in various lithium projects to expand its mining capabilities. The restart of the Quebec lithium plant operation back in June 2022 has seen a slight improvement in the stock price.

Sayona Mining is in partnership with Piedmont Lithium. Piedmont Lithium has a 25% stake in Sayona, Quebec, which could be a significant factor in driving its price based on the relationship between the two companies. As of writing 11:23 AM GMT +3 July 13 2022, the stock is trading at $0.130.

Sigma Lithium

Sigma Lithium

Sigma Lithium is a unique company that is putting its efforts into becoming environmental friendly, low-cost lithium products. The Canadian setup has its mining operations located in Brazil's Minas Gerais State. There are 9 lithium mines in the 27 mineral rights that cover an area of 191 km square. 

The company is on track to finish its plants and has completed 25% of the total construction work in Brazil. It plans on hiring 600 professionals during October and November 2022. The government of Brazil has also issued a decree to support unrestricted trade of lithium products, which will certainly uplift the stock.

Core Lithium

Core Lithium

Core Lithium is developing its project near Darwin Port in the Northern Territory, Australia. The Finnis project is strategically located close to the power grid, gas, and railway lines. The final hurdles in the extraction of lithium were removed back in 2020 when the company had its Core Mine Management Plan approved by the Northern Territory Government.

With all things in place, Core Lithium plans to begin its production at the end of 2022. The share price has skyrocketed in the past couple of years. The short-term pullbacks might be a temporary setback for a bright future.

Sociedad Quimica y Minera 

Sociedad Quimica y Minera

Sociedad Quimica y Minera is one of the oldest mining establishments that was founded on June 11, 1968. The company has its headquarters located in Santiago, Chile, which automatically provides it with the best lithium minerals while keeping the production costs at bay. The company has a total of 6081 collaborators worldwide and is working on the sustainability of the environment by the late 2030s and 2040s.

With the increasing demand for lithium batteries and the lithium development contract from the Chilean government, the stock price lifted substantially at the beginning of 2022. As profit-taking continues to occur, the shares are witnessing a specific dip.

Frontier Lithium 

Frontier Lithium

Frontier Lithium is developing a PAK Lithium Project with 9.3 Mt of 2% Li2O. The plant is established in Great Lakes Region of North America with a 26-year life span. The average annual EBITDA is $225 million with a 22.5% contingency.

Frontier Lithium is listed on the Toronto Stock Exchanges and has a market cap of $351.52 million. As with other lithium mining companies, it has seen a steady decline from the beginning of May. The management and directors own 25% of the company stocks to highlight it as a safe investment.

Global Lithium

Global Lithium

Globally Lithium is relatively a new company in the Lithium mining sphere. The company is rapidly growing its Marble Bar Lithium Project and Manna Lithium Project. This was observed in the rapid jump in the stock price from May 2021 to March 2022. Assay results from the positive drilling confirmed the extensive lithium deposits in the MBLP. The excavation project continues 

in the first quarter of 2022, where approximately 60,000m of RC drilling is underway. 

Potential shareholders can use the Computershare Investor Services Pty Limited website to set up, review, and update their shareholdings. The diamond drilling projects are running as per schedule, which gives a positive outlook for now.

Lithium Energi Exploration

Lithium Energi Exploration

Lithium Energi Exploration is a Canada-based exploration company that operates in Argentina. It is working on three projects, i.e., Laguna Caro Project, Antofalla North Project, and Antofalla South Project, covering over 100000 hectares. The triangle joint venture has been ongoing since June 16, 2022. The upcoming years may bring positive news from the setup.

With the increasing lithium prices worldwide, the company may generate hefty profits from the mining process. 

Investing in lithium stocks: is it worth it?

The demand for lithium has been growing at an exponential rate in the past 7 years. These publicly listed companies can offer potential investors an opportunity to gain exposure to lithium mining. Given all this need for new technologies that require high-quality batteries, lithium is undoubtedly in high demand. The necessity will continue its growth in the coming decade, where the best lithium stocks will observe a steady uprise.

Top lithium stocks verdict

Lithium is one of the earth's slightly rare minerals, which makes exploring and extracting it from its natural sources a bit challenging. This scarcity has led to an increase in demand, making lithium only one of a handful of metals that have experienced double-digit price increases over the last 10 years.

The global demand for lithium will continue to grow as automakers introduce more electric vehicles into their fleets. Most high-performance computing and artificial intelligence applications continue to expand their use of the metal for recharging purposes. 

It would not be wrong to say that investors should look out for lithium mining companies in the standard lithium stock forecast. They have the potential to go for a bullish run into 2030 and even 2040. Tesla may choose to set up their own lithium rig in the future, which is also a factor to consider. 

 

See also:  Top Lithium-Ion Battery Manufacturers | Storage News | Top Energy Storage Batteries Stocks | Top Solar Storage Products |  Top Energy Storage Companies  Top Energy Storage Batteries ETFs


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