In this article, we discuss the 10 cheap lithium stocks to buy today. If you want to read about some more lithium stocks available at bargain prices, go directly to 5 Cheap Lithium Stocks to Buy Today.
In late June, investment banks Goldman Sachs and Credit Suisse rattled investors by predicting that the bull market in electric battery metals, like lithium, coal, and nickel, would reverse in 2022 as supplies from unconventional new sources overwhelms demand. Goldman analysts Nicholas Snowdon and Aditi Rai wrote in a note to clients that there would be a “sharp correction” in lithium prices. The metal is averaging nearly $54,000 per ton this year, down from a spot price of $60,000 per ton. Analysts expect this value to come down to $12,000 in 2023.
The analysts predict that there has been “a surge in investor capital into supply investment tied to the long term EV demand story, essentially trading a spot driven commodity as a forward-looking equity”. Per the experts, this “fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend”. The companies expected to benefit from this decrease in metal prices include Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX).
However, other investment advisors are disputing this prediction. For example, Daisy Jennings-Gray, a senior price analyst at Benchmark, told news platform Bloomberg recently that the mining industry is famously bad at hitting production targets and lithium has added risks due to the highly complex technical processes involved in making the final products used in battery packs. Gray claims that lithium is not a commodity and should not be treated as such, but as a specialty chemical.
For investors that are seeking to profit from a surge in lithium demand, there are several cheap stocks in the sector that offer the same growth potential as their more expensive counterparts and come with much lower risk profiles. There are concerns that if the prices of lithium fall, like Goldman and Credit Suisse have predicted, it could cause miners to cancel new projects, setting the stage for even larger spikes and deeper deficits in the coming years. Lithium prices, though, remain stable as the markets enter the last few months of the fiscal year.
Our Methodology
The companies that operate in the lithium sector and are trading at relatively cheap prices compared to their growth potential were selected for the list. The share prices of the stocks, as of September 13, are mentioned alongside other details for further clarity. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Mika Baumeister on Unsplash
Cheap Lithium Stocks to Buy Today
10. Noram Lithium Corp. (OTC:NRVTF)
Number of Hedge Fund Holders: N/A
Share Price as of September 13: $0.41
Noram Lithium Corp. (OTC:NRVTF) engages in the acquisition, exploration, and development of mineral properties. One of the flagship properties of the firm is the Zeus Lithium project. The project covers an area of almost 1,113 hectares. It is located in Clayton Valley of the Nevada state in the United States. The firm has a market capitalization of close to $37 million.
Noram Lithium Corp. (OTC:NRVTF) was founded in 2010 and is based in Canada. It was formerly known as Noram Ventures Inc. and changed that name to Noram Lithium Corp. in July 2021.
Noram Lithium Corp. (OTC:NRVTF) recently received permits from the Nevada authorities for upgradation work on the Zeus lithium project. The firm is working to complete a feasibility study on the project by 2022.
Just like Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Noram Lithium Corp. (OTC:NRVTF) is one of the stocks that smart investors should monitor in the EV space.
9. Ultralife Corporation (NASDAQ:ULBI)
Number of Hedge Fund Holders: 1
Share Price as of September 13: $5.07
Ultralife Corporation (NASDAQ:ULBI) designs, manufactures, installs, and maintains power, communication, and electronics systems worldwide. The company has a battery and energy products division that makes and sells lithium 9-volt, thin lithium manganese dioxide, rechargeable, and other non-rechargeable batteries, as well as lithium-ion cells, multi-kilowatt module lithium ion battery systems, and uninterruptible power supplies. The firm was founded in 1990 and is based in Newark.
Ultralife Corporation (NASDAQ:ULBI) posted earnings for the second quarter of 2022 on July 28, reporting earnings per share of $0.03, beating analyst estimates by $0.02. The revenue over the period was $32 million, up close to 20% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Ultralife Corporation (NASDAQ:ULBI), with 180,589 shares worth more than $822,000.
8. Westwater Resources, Inc. (NYSE:WWR)
Number of Hedge Fund Holders: 5
Share Price as of September 13: $1.545
Westwater Resources, Inc. (NYSE:WWR) operates as an energy materials developer. Although the company is not a pure-play lithium stock, it is on track to become the largest supplier of battery-grade graphite to companies that are making lithium-ion batteries. The recently passed Inflation Reduction Act incentivized lithium-ion battery production in the US, and the firm is fast-tracking work on the Kellyton graphite processing plant in east-central Alabama to shore up graphite supplies for lithium battery firms in the coming months.
Westwater Resources, Inc. (NYSE:WWR) posted earnings for the second quarter of 2022 on August 11, reporting losses per share of $0.07. The firm revealed that cash and working capital as of June 30 were $109 million and $102 million.
At the end of the second quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $1.2 million in Westwater Resources, Inc. (NYSE:WWR), the same as in the previous quarter worth $2.6 million.
7. CBAK Energy Technology, Inc. (NASDAQ:CBAT)
Number of Hedge Fund Holders: 6
Share Price as of September 13: $1.41
CBAK Energy Technology, Inc. (NASDAQ:CBAT), together with its subsidiaries, develops, manufactures, and sells lithium batteries. These batteries are used in a variety of applications, including electric cars, electric buses, hybrid electric cars and buses, electric bicycles, electric motors, electric tools, energy storage, uninterruptible power supply, and other high power applications. The company is based in China and was founded in 1999. It has a market capitalization of over $120 million.
CBAK Energy Technology, Inc. (NASDAQ:CBAT) posted earnings for the second quarter of 2022 on August 15, reporting earnings per share of $0.00. The revenue over the period was $56 million, up close to 856% year-on-year.
At the end of the second quarter of 2022, 6 hedge funds in the database of Insider Monkey held stakes worth $1.4 million in CBAK Energy Technology, Inc. (NASDAQ:CBAT), compared to the same in the preceding quarter worth $2.3 million.
6. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 9
Share Price as of September 13: $31.20
Lithium Americas Corp. (NYSE:LAC) operates as a resource company in the United States and Argentina. Reports over the past few months suggest that the company is considering the separation of lithium operations in the US and Argentina. The main aim of this plan is to create a standalone public firm whose primary interests are in the development of the Thacker Pass lithium project in Nevada. Jonathan Evans, the CEO of the firm, has said the separation would make it easier for the company to achieve strategic objectives.
On July 22, investment advisory Canaccord maintained a Speculative Buy rating on Lithium Americas Corp. (NYSE:LAC) stock and lowered the price target to C$49 to C$50. Analyst Katie Lachapelle issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Singapore-based investment firm Himension Capital is a leading shareholder in Lithium Americas Corp. (NYSE:LAC), with 3.3 million shares worth more than $66.9 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Lithium Americas Corp. (NYSE:LAC) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, Massif Capital, an asset management firm, highlighted a few stocks and Lithium Americas Corp. (NYSE:LAC) was one of them. Here is what the fund said:
“Lithium Americas Corp. (NYSE:LAC): The volatility noted above in Lithium Americas Corp. (NYSE:LAC) has resulted in solid returns via our options trades around our core equity position. At the current time, we are short calls on Lithium Americas Corp. (NYSE:LAC), as we have done multiple times throughout the position’s life, expiring on May 21, 2021, at a $17.5 and $22.5 strike price. The volume of contracts sold at each strike corresponds to the size of the equity position we want should the calls expire in the money, and the underlying equity gets called away from us. The thought process behind this trade construction is that if we know the size of the position we want at a particular price point, there is no reason not to accumulate additional returns by pre-selling the stock we would… (click here to read more).
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Disclosure. None. 10 Cheap Lithium Stocks to Buy Today is originally published on Insider Monkey.