5 Cheap Lithium Stocks To Buy According To Analysts

In this article, we discuss 5 cheap lithium stocks to buy according to analysts. If you want to see more stocks in this selection, check out 10 Cheap Lithium Stocks To Buy According To Analysts. 

5. Sigma Lithium Corporation (NASDAQ:SGML)

Number of Hedge Fund Holders: 8

Upside Potential as of January 27: 47.41%

Average Price Target Based on Analyst Ratings: $45.24

Sigma Lithium Corporation (NASDAQ:SGML) is a Canadian mineral development company engaged in the exploration and development of lithium deposits in Brazil. It is one of the best battery stocks to monitor. On December 5, Sigma Lithium Corporation (NASDAQ:SGML) announced that it aims to nearly triple its planned production of battery grade lithium concentrate to approximately 100,000 metric tons per year of lithium carbonate equivalent by 2024 following results from a study at its Grota do Cirilo project in Brazil. 

On January 19, BMO Capital analyst Joel Jackson initiated coverage of Sigma Lithium Corporation (NASDAQ:SGML) with an Outperform rating and a $40 price target. The stock has already performed well due to increasing interest in electric vehicles, but the analyst believes there is still potential for growth as Sigma becomes a larger producer by the middle of 2023 and becomes a more appealing acquisition target.

According to Insider Monkey’s Q3 data, 8 hedge funds were long Sigma Lithium Corporation (NASDAQ:SGML), compared to 3 funds in the prior quarter. Jack Ripsteen’s Potrero Capital Research is the largest stakeholder of the company, with 596,930 shares worth $16.2 million. 

4. Lithium Americas Corp. (NYSE:LAC)

Number of Hedge Fund Holders: 14

Upside Potential as of January 27: 61.18%

Average Price Target Based on Analyst Ratings: $35.75

Lithium Americas Corp. (NYSE:LAC) was incorporated in 2007 and is headquartered in Vancouver, Canada. It is a resource company that explores for lithium deposits. On December 20, Lithium Americas Corp. (NYSE:LAC) announced that it would acquire Arena Minerals for an implied equity value of $227 million, in a move to enhance its presence in the Pastos Grandes basin in Argentina. It is one of the best battery stocks to consider. 

On January 16, National Bank analyst Lola Aganga maintained an Outperform rating on Lithium Americas Corp. (NYSE:LAC) but lowered the firm’s price target on the shares to $38.50 from $42.50. The new target reflects updated commodity price estimates, but Lithium Americas Corp. (NYSE:LAC) is still considered a top choice as it is fully financed and set to become a near-term producer of lithium. It is also progressing with the largest new brine operation in the last decade and is on track to begin production in the first half of 2023, the analyst told investors. 

According to Insider Monkey’s data, 14 hedge funds were bullish on Lithium Americas Corp. (NYSE:LAC) at the end of September 2022, up from 9 funds in the last quarter. Jay Chen’s Himension Capital is the biggest stakeholder of the company, with 3.26 million shares worth $85.6 million. 

Here is what Massif Capital has to say about Lithium Americas Corp. (NYSE:LAC) in their Q1 2021 investor letter:

“Lithium Americas: The volatility noted above in LAC has resulted in solid returns via our options trades around our core equity position. At the current time, we are short calls on 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 have sold anyway.

High levels of volatility positively impact the price of options, increasing the premium we can earn from selling covered calls. To date, we have sold covered calls on LAC that have expired worthless four times, yielding a roughly 7% return on the equity position’s current value of 71 bps for the portfolio overall. The outstanding covered calls appear to be trending towards a similar worthless expiration. If they do, the covered call trades on LAC will result in us owning the shares with committed capital of -$0.28 per share.

Although we believe in the fullness of time LAC warrants a $30+ valuation, the prices achieved in early January of this year were not justified by the underlying fundamentals. Some will argue we should have sold down our position. We had already established our option positions and believe LAC is an emerging major in the lithium mining industry. Thus, we decided to maintain the position unchanged. Although still relatively high, the current $15 per share valuation is not crazy compared to where we think the firm should be trading based on fundamentals, so we are no longer overly concerned with the position as is.

LAC management also took advantage of the volatility issuing stock on January 22 for $22 a share. The ~$400 million in proceeds will be used to develop Thacker Pass, the US-based clay lithium deposit, which will likely be the largest producing Lithium mine in America when turned on. In our opinion, the stock issuance could not have come at a better time. LAC management has advanced the project through various development stages (de-risking), but with the share issuance, they have significantly reduced the need to bring in an outside partner to develop the asset as the first phase of the project is expected to cost roughly $581 million. After-tax and at an 8% discount rate, the Thacker Pass project’s present value is approximately $2.6 billion (the firm’s current market capitalization is $1.5 billion). Although the share issuance was dilutive, increasing the total shares by 17%, we believe it will, in the long run, prove a forward-looking, value-additive decision by management.

The lithium market remains an area of interest and focus for us. This reflects our belief that the most exciting investment opportunities to capture secular trends in EV’s and batteries are found upstream in the mining industry. It is also a reflection that there is a greater diversity of lithium investment opportunities relative to other battery metals.”

3. Piedmont Lithium Inc. (NASDAQ:PLL)

Number of Hedge Fund Holders: 12

Upside Potential as of January 27: 64.08%

Average Price Target Based on Analyst Ratings: $109.67

Piedmont Lithium Inc. (NASDAQ:PLL) is a North Carolina-based exploration stage company, engaged in the exploration and development of resource projects in the United States, specializing in the lithium business. Piedmont Lithium Inc. (NASDAQ:PLL) is one of the best battery stocks to invest in. On January 3, Piedmont Lithium Inc. (NASDAQ:PLL) stock surged 7.9% after the company amended its deal to supply spodumene concentrate to Tesla, Inc. (NASDAQ:TSLA) through the end of 2025, with an option to renew for an additional three years. 

On December 2, DA Davidson analyst Matt Summerville raised the price target on Piedmont Lithium Inc. (NASDAQ:PLL) to $90 from $85 and kept a Buy rating on the shares. The analyst noted the recent developments across the company’s global lithium assets, including a $142 million DoE grant for Tennessee Lithium. The analyst also sees an “illogical valuation gap” between Piedmont Lithium Inc. (NASDAQ:PLL)’s market value and the earnings power of its Sayona offtake and associated 25% ownership of NAL.

According to Insider Monkey’s data, 12 hedge funds were bullish on Piedmont Lithium Inc. (NASDAQ:PLL) at the end of September 2022, compared to 11 funds in the prior quarter. 

2. FREYR Battery (NYSE:FREY)

Number of Hedge Fund Holders: 22

Upside Potential as of January 27: 116.26%

Average Price Target Based on Analyst Ratings: $18.75

FREYR Battery (NYSE:FREY) focuses on the production of battery cells for stationary energy storage, electric mobility, and marine applications in Europe and internationally. The company designs and manufactures lithium-ion based battery cell facilities. It is one of the best battery stocks to buy according to analysts. On January 12, FREYR Battery (NYSE:FREY) stock gained over 6% after the company signed its first e-mobility offtake agreement. Freyr will supply 10 – 14 GWh of battery cells to Impact Clean Power Technology from 2025 to 2030. 

On January 12, Goldman Sachs analyst Philipp Konig assigned a Buy rating and a $19 price target to FREYR Battery (NYSE:FREY). The company’s first commercial offtake agreement with Impact Clean Power Technology marks its first deal with a player in the mobility space and supports his bullish thesis on the stock, the analyst wrote in a research note.

According to Insider Monkey’s Q3 data, 22 hedge funds were long FREYR Battery (NYSE:FREY), compared to 16 funds in the last quarter. Daniel Patrick Gibson’s Sylebra Capital Management is the largest stakeholder of the company, with 12.80 million shares worth $182.2 million. 

1. Enovix Corporation (NASDAQ:ENVX)

Number of Hedge Fund Holders: 30

Upside Potential as of January 27: 162.78%

Average Price Target Based on Analyst Ratings: $21.39

Enovix Corporation (NASDAQ:ENVX) was founded in 2007 and is headquartered in Fremont, California. The company designs, develops, and manufactures silicon-anode lithium-ion batteries. Enovix Corporation (NASDAQ:ENVX) is one of the best battery stocks to monitor. 

On January 26, JPMorgan analyst Bill Peterson maintained an Overweight rating on Enovix Corporation (NASDAQ:ENVX) but lowered the firm’s price target on the shares to $16 from $28. The analyst believes that institutional investor sentiment in the transportation and fuel transformation industry is currently negative or muted. Due to macro volatility and concerns of a recession, investor expectations may remain low in the short term. However, he predicts that if interest rates stabilize, there could be a recovery in the latter half of the year. 

According to Insider Monkey’s data, Enovix Corporation (NASDAQ:ENVX) was part of 30 hedge fund portfolios at the end of the third quarter of 2022, compared to 23 funds in the last quarter. Peter S. Park’s Park West Asset Management is the largest stakeholder of the company, with more than 9 million shares worth $166.7 million.

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