QuantumScape Stock Charges Up On Apple EV News
QuantumScape (QS Stock Report) stocks are jolting higher again this week, rising nearly 80% since the week started. This came after speculation that it could be a beneficiary of Apple’s (AAPL Stock Report) own EVs. For the uninitiated, QuantumScape is a developer of solid-state lithium-metal batteries for EVs. Truth be told, investors have been very excited about the company’s battery technology since QuantumScape merged with a special purpose acquisition company (SPAC) late last month.
The speculation is not without reasons. You see, Apple has a massive pile of cash, and when there’s a right fit for its technology, the speculation is not unwarranted. With strong backers such as Volkswagen (VWAGY Stock Report) and Bill Gates, could QuantumScape be Apple’s next investment? Your guess is as good as mine. The solid-state battery company highlighted its technology in a presentation earlier this month. And if it works as the company claims, existing EV battery technology would have to take a back seat.
If you have been following the EV industry, you may be thinking of buying stocks of EV manufacturers. But that’s not the only way to benefit from the rise of EVs. After all, many EV stocks are relatively young. We wouldn’t be able to know for sure which EV manufacturers will succeed. Therefore, an alternative would be looking at battery stocks. After all, regardless of brand, all EVs need batteries. Investors are not just looking at battery manufacturers, but also suppliers of lithium. After all, lithium is a key element in pretty much all EV batteries. With all that in mind, do you have these top battery stocks on your watchlist in 2021?
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Top Battery Stocks To Watch In January 2021: Lithium America Corp.
Lithium Americas Corp. (LAC Stock Report) operates as a resource company in the United States. It has interests in the Cauchari-Olaroz Project in the province of Jujuy in Argentina and owns a 100% interest in the Thacker Pass lithium project in northwestern Nevada. The company’s stock price jumped 21.26% on Tuesday’s intraday trading without any specific news. If we are to speculate, it appeared that the rising tide led by QuantumScape was lifting all boats.
The company’s stock price has been on an upward trend since the market crash in March. Investors may not be comfortable in investing in battery stocks because of their volatility. Some may also have reservations about the risk of fluctuations in commodity prices which would affect earnings. But as long as lithium batteries remain in demand, I wouldn’t be losing any sleep.
On top of that, the company has recently obtained the final approval for its Nevada lithium project, with full federal permitting expected by early 2021. And according to Reuters, “Lithium Americas has said it plans to spend $400 million on the first phase of its Thacker Pass project with an output of 20,000 tonnes of lithium annually. The mine is expected to open by 2023.” Considering the positive development, would you be watching LAC stock as the new year approaches?
Top Battery Stocks To Watch In January 2021: Sociedad Quimica y Minera de Chile
As the name suggests, Sociedad Quimica y Minera de Chile (SQM Stock Report) is a Chile-based company with a global presence in the lithium business. As you may or may not know, Chile has the world’s largest lithium reserves. The country has 8.6 million metric tons of lithium, according to Statista.com. For starters, the company both produces and distributes industrial chemicals, specialty fertilizers, and crops, as well as lithium products. Now, many may have reservations given the foreign name. But make no mistake. This is no startup. In fact, the company is worth $13 billion.
With the rise in demand for EVs, the demand for lithium will likewise increase. If there is any producer that can rise to the occasion to meet the demand, it is SQM. From its third-quarter earnings release, the company’s CEO told investors: “I’m happy to announce that today the Board approved expanding our lithium capacity even further in order to reach 180,000 and 30,000 metric tons of lithium carbonate and lithium hydroxide respectively by 2023.” Certainly, the company did not disappoint its shareholders.
SQM stock has been on an upward trend since the market sell-off in March and is up more than 200% as of Tuesday’s closing. To top it all off, The company has generated positive free cash flows every year for at least 10 years now. Given its strong track record, there is little doubt of the company’s ability to scale up and meet the rising demand for lithium batteries. With that in mind, is Sociedad Quimica y Minera the best battery stock to buy and hold for the long term?
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Top Battery Stocks To Watch In January 2021: Enphase Energy
Last on this list is Enphase Energy (ENPH Stock Report). Enphase is a California based company that designs and manufactures software-driven home energy solutions. This includes solar generation, home energy storage, and web-based monitoring and control. While Enphase is not part of the EV battery supply chain, it does tap into the broader shift towards renewable energy. Enphase stocks are up by over 504% year-to-date and are traded at $177.27 as of Tuesday’s closing.
From the company’s latest quarter financial report, Enphase posted revenue of $178.5 million. This is a 42% increase from the previous quarter. The company also reported a 53.2% gross margin. Evidently, this is due to microinverter products rebounding strongly in this quarter. The company says that it experienced record sell-through from distribution to installers. In Enphase’s fourth-quarter financial outlook, the company expects revenue of $245 million to $260 million.
Recently, the company launched its Enphase Installer Network (EIN) in Australia. The EIN recognizes a network of trusted installers that deliver exceptional homeowner experiences using Enphase products. It is designed to help Enphase installers grow their business with a range of innovative digital tools and benefits. This will help the company expand its reach in Australia as installers will be able to deal directly with homeowners and small business owners. With such exciting development surrounding Enphase, is ENPH stock worth adding to your watchlist?