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The 3 Most Undervalued Lithium Stocks to Buy Now: August 2023
Several lithium stocks to buy in August have moved up and down for a variety of reasons. For one, they’re part of a commodities market that is inherently…
Several lithium stocks to buy in August have moved up and down for a variety of reasons. For one, they’re part of a commodities market that is inherently volatile due to the nature of the business. Basic material prices are subject to so many determining factors that accurately predicting their future levels becomes an exercise in futility. Second, investor sentiment regarding electric vehicles (EVs) builds and falls over the short term despite the long-term outlook.
Make no mistake, their long-term outlook remains very positive. Compound annual growth rates in excess of 22% are expected to characterize the market through 2030. Thus, picking up strong lithium stocks to buy in August has a lot of inherent appeal for investors.
Albemarle (ALB)
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Albemarle (NYSE:ALB) is arguably the best-known lithium stocks at this point. Its position as one of the leading producers within the U.S. market has become clear over the past few years. As mentioned, demand is forecast to grow. Yet, ALB shares remain cheap based on the simple comparison of price and price expectations for those shares.
Even though Albemarle remains underappreciated it is continuing to grow. In Q2 2023 revenues grew by 60% reaching $2.4 billion while net income rose by 60% as well. Those results, while strong, weren’t as strong as the firm’s results on a sequential basis. That’s logically why ALB shares remain inexpensive. There are short-term concerns causing fear. Ignore them. Consider the long-term view.
Albemarle increased its 2030 lithium demand forecast by 15% over its previous expectations early this year. The company expects demand to rise through 2030 and sees a supply shortfall. Basic economics paint a clear picture. Prices are set to rise over the long term.
Snow Lake Resources (LITM)
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Snow Lake Resources (NASDAQ:LITM) is a lithium firm based in Canada. The stock is very cheap at less than $2. Snow Lake Resources is Nasdaq listed. That’s worth mentioning because oftentimes, stocks at that price trade over the counter. In short, LITM shares are more secure, trustworthy, and much more liquid.
Snow Lake Resources controls the rights to 59,587 acres of land. 1% of that land has been explored. Exploration of that tiny percentage of land has resulted in 11.1 million metric tonnes of proven lithium. Those proven reserves could produce 160,000 tonnes of lithium per year for a period of 8-10 years once commercialized.
Snow Lake Resources has the potential to become a strategically important firm in the EV race. For now, LITM remains in the pre-revenue stages. It’s a clear gamble but there are also proven resources within the firm. At less than $2, LITM shares are bound to get some attention.
Lithium Americas (LAC)
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Lithium Americas (NYSE:LAC) stock has the potential to become a strategically-important lithium asset. It’s well on its way there and the chance at success will remain for years to come. The company recently commenced operations at Thacker Pass.
Thacker Pass is the largest lithium resource in the United States. The company succeeded in receiving mining permission back in Februrary. In March, construction started.
Lithium Americas is on a clear path toward becoming an integral link in the North American EV supply chain. The company separated its operations in order to fully seize the Thacker Pass opportunity. Argentine operations will operate separately moving forward.
Lithium Americas has the attention of U.S. firms. Early this year, General Motors (NYSE:GM) agreed to provide a $650 million equity investment in the firm. It was the biggest raw materials investment ever by a manufacturer. That’s a massive vote of confidence in everything Lithium Americas stands for and should indicate to investors that EVs are here to stay. Thacker Pass is expected to provide enough lithium required to manufacture 1 million EVs annually once operational.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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