Are These The Best Lithium Stocks Amid The EV Revolution?
Lithium is a crucial commodity for the burgeoning electric vehicle (EV) market. With so much going on in the EV space in the past few weeks, lithium stocks will likely receive greater attention from investors. The higher the demand for EV, the demand for a battery to power the EV will also be higher, right? After all, lithium is the ‘essential’ component and serves as the backbone for the EV industry. Just imagine what would happen to the share prices of Tesla (TSLA Stock Report) or Nio Inc (NIO Stock Report) if these lithium suppliers decided to stop their supply to these EV makers. Investors eyeing EV makers, for instance, may want to swap out some auto stocks into lithium stocks. After all, lithium suppliers are less dependent on the popularity of a given EV brand at any time.
The increasing coronavirus cases globally may inadvertently be a longer-term catalyst for lithium stocks. Yes, we saw weaker demand in the short-term with many battery producers and exporters having moderated production on the back of a weak demand outlook. But the recent deliveries reports from both Tesla and Nio are providing a more optimistic outlook for the industry. This shows that the long-term outlook for lithium remains positive and lithium stocks are still worth a shot.
As the world electrifies ground-based transportation and seeks solutions to intermittent power production from renewable energy sources, demand for lithium batteries is expected to soar. However, it would be best to do more research before diving straight into lithium stocks. This will allow a better understanding of the lithium industry and the long term investing opportunity presented by producers. With all that in mind, are these lithium stocks on your watchlist for the second half of 2020?
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Best Lithium Stocks To Buy [Or Sell]: Albermale
Albermale (ALB Stock Report) is one of the largest lithium producers in the world. The chemicals company has a significant lithium business that develops a broad range of lithium compounds. These products are used in manufacturing various products such as batteries used in consumer electronics and electronic vehicles. By now, investors should be able to recognize the impact of EV production in driving up lithium demand in the long term. ALB stocks gained 38% in the past 3 months but the stock has slipped over 3% in the past month.
With production of EV beginning to pick up pace, could ALB stock follow suit? The demand for ALB’s lithium is expected to be supported by improving deliveries in EV. Besides, lower costs for lithium ion batteries, increasing battery performance and favorable policies toward renewable energy usage also help. The company has long term supply agreements with customers that makes it a preferred global lithium partner. This allows the company to leverage its advantage of low-cost resources to its benefits. That said, the long term contract model has also protected the company from tumbling lithium prices. For this reason, ALB stock appears to be one of the best bets when it comes to investing in lithium stocks.
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Best Lithium Stocks To Buy [Or Sell]: Panasonic Corporation
Most people think of home electrical appliances when they think of Panasonic (PCRFY Stock Report). The main reason why investors are starting to look at this stock recently is that the company entered into a 3 year deal with Tesla. The deal is planning to expand the production facility for batteries and powertrains in Nevada. PCRFY Stock could benefit from the strong demand for Tesla’s vehicles. Apart from Tesla, the company also partnered with Toyota to manufacture batteries for their EV.
The stock’s performance, however, has remained sub-par with major market indices. PCRFY stock has been hovering around $8-9 for the past one month. Perhaps you think that Panasonic is just a boring stock that doesn’t have big swings. Now, that is not entirely false. But it is important for investors to note that the company has been seeing solid activity on the earnings estimate front. After all, it is a large company with a wide range of products. With a PE ratio of 9.9 and healthy dividend yield, would PCRFY stock be the next lithium stock to have a breakout?