Crisis became an opportunity for lithium stocks.
In fact, as I noted on Dec. 13, “I’d use the temporary, excessive fear as an opportunity. That’s because the pullback was ridiculously overdone. Sure, supply issues still exist. But down the line, we won’t have enough supply to meet growing demand.”
Even lithium producers are still bullish. “In calls with investors and analysts in recent days, lithium producers said they saw the market volatility as short term, adding that they expect electrification to keep growing,” said Reuters.
Shortly after, lithium stocks started to pivot higher, as hoped. Now, with lithium finally bottoming out, there’s still time to buy.
Albemarle (ALB)
The last time I mentioned Albemarle (NYSE:ALB), it had just rebounded to $128. Today it’s up to $145.45, and could see $200 again soon, in my opinion.
For one, ALB has just started to pivot higher as lithium prices begin to bottom out now. Two, while we wait for a bigger recovery in ALB, we can collect its yield of 1.1%. Three, analysts at Bank of America just upgraded the ALB stock to a neutral rating with a price target of $149 a share.
Also, remember, even though ALB lowered its sales guidance from a range of 40% to 55% growth, it still expects sales growth of 30% to 35% this year. That’s not bad at all considering slumping demand and supply issues. Albemarle is one of the top lithium stocks to buy and hold today.
Livent Corp. (LTHM)
Another one of the top lithium stocks to buy and hold is Livent Corp. (NYSE:LTHM).
On Dec. 13, I also noted, “JPMorgan and Piper Sandler lowered their ratings on the LTHM stock in recent days, that’s a bad call, in my opinion. With the lithium price pullback being a temporary event, investors should take full advantage of the weakness here.”
At the time, LTHM traded around $15. It’s now up to $17.23, proving they made a bad call.
From here, I’d like to see LTHM test $20 a share thanks to three key catalysts.
One, LTHM will be added to the S&P Mid Cap 400 on Jan. 2. Two, Livent and Allkem shareholders just approved the merger announced in May, which will create a global lithium powerhouse valued at $10.6 billion. Three, lithium prices are just starting to recover.
Piedmont Lithium (PLL)
Next up is Piedmont Lithium (NASDAQ:PLL), which is consolidating around $29.82 a share. From here, I’d like to see it initially retest $37.50.
Helping, North Carolina just granted the company more time to provide further information on its mine permit application. If the mine is eventually approved, it could become one of North America’s biggest sources of lithium, according to Seeking Alpha.
Also, according to President and CEO Keith Phillips, “America’s pro-EV and battery manufacturing policies are providing an advantage to Piedmont at a time when many analysts are projecting lithium shortages to continue into the 2030s.”
American Lithium (AMLI)
I also mentioned American Lithium (NASDAQ:AMLI) on Dec. 13, as it traded at $1.10. It’s now up to $1.22 an could soon test $1.40 a share.
All in anticipation of fast-track approval of its Falchani lithium project in Peru. AMLI also just “raised its estimates for the Falchani project by 476% from 2019, saying it could hold 5.53M metric tons of lithium carbonate equivalent, which would make it one of the world’s largest hard-rock lithium projects.”
In addition, according to Simon Clarke, CEO of American Lithium, “We continue to make excellent progress at Falchani and this very large increase and reclassification of the Falchani Resource follows a very successful drill program completed Q3, 2023. With the Deposit still open in numerous directions, we expect the scale of the Project and the size of the Resource to continue to grow.”
Sociedad Quimica y Minera (SQM)
There’s also Sociedad Quimica y Minera (NYSE:SQM).
After a rough few months, SQM finally bottomed out around $47, rebounding to $60.14. From here, I’d like to see it retest $72. Better, as we wait for the stock to push even higher and for lithium prices to recover, we can collect SQM’s current yield of 8.36%.
Unfortunately, earnings have been nothing to write home about recently.
In fact, in its most recent quarter, SQM posted lower-than-expected revenue and earnings thanks to lithium price weakness. Revenue slipped 38% year over year to $1.84 billion. Net income came in 56% lower year over year to $479.9 million, as EPS crumbled 56% to $1.68 year over year as well. However, most of that bad news has been priced into the stock. With lithium prices bottoming out, SQM could push aggressively higher.
Amplify Lithium & Battery Technology ETF (BATT)
Or, you can always diversify at a lower cost with an ETF, such as the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT).
With an expense ratio of 0.59%, it offers exposure to global companies that develop, produce, and use lithium battery technology. Last trading at $10.69, the BATT ETF is still ridiculously oversold. From its current price, I’d like to see it retest $12 near term, especially with lithium prices bottoming.
Global X Lithium & Battery Tech ETF (LIT)
There’s also the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT).
With an expense ratio of 0.75%, the LIT ETF invests in the complete lithium cycle. Everything from mining and refining the metal through battery production. Some of its top holdings include Albemarle, TDK Corp. (OTCMKTS:TTDKY), BYD Co. (OTCMKTS:BYDDF), Tesla, Livent Corp., Piedmont Lithium (NASDAQ:PLL), and Standard Lithium (NYSEAMERICAN:SLI).
LIT is also oversold at $49.55. From here, I’d like to see it rebound back to $56—especially with the lithium story about to get hot again.
On the date of publication, Ian Cooper did not hold (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.
