3 Lithium Stocks to Buy Now: Q2 Edition

Stocks to buy

Lithium prices may be bottoming out, creating a big opportunity for some of the top lithium stocks to buy now. For one, analysts at UBS and Goldman Sachs just cut their 2024 supply estimates by 33% and 26%, respectively, says Mining.com. Meanwhile, Morgan Stanley just warned about lower inventories in China.

In addition, “Double-digit capacity has already been taken out of the lithium market and that usually is a sign that the commodity price is bottoming,” added Jun Bei Liu, a hedge fund manager at Tribeca Investment Partners, as quoted by Bloomerg.

Bank of America analysts also say lithium prices could average about $14,000 per metric ton this year. That’s up nicely from a prior call for $10,000 a ton. And, as I noted on Jan. 21, “With some lithium mines shutting down or reducing production we could see less supply. This could help stabilize prices and send lithium prices higher with demand.” 

That being said, it’s time to buy the blood in the streets with top lithium stocks to buy now.

Piedmont Lithium (PLL)

Source: T. Schneider / Shutterstock.com

One of the top lithium stocks to buy now is Piedmont Lithium (NASDAQ:PLL).

Granted, its chart is ugly. But the company just received approval for a permit for the construction and operation of its proposed Caroline Lithium project from North Carolina.

For one, “Technical studies have demonstrated that Carolina Lithium could be a low-cost producer of spodumene concentrate and lithium hydroxide, benefitting from exceptional infrastructure, minimal transportation distances, low energy costs, a deep local talent pool, and proximity to cathode and battery customers,” the company said.

Two, the company says its mine could be one of North America’s biggest sources of lithium for electric vehicle batteries. Plus, it also holds all permits for its project in Tennessee, where it expects to start construction soon. Piedmont also partnered with Vinland Lithium to advance a project in Newfoundland, Canada. 

Analysts at BMO Capital recently initiated coverage of Piedmont Lithium with a market perform rating, with a price target of $20 a share.

Sociedad Quimica y Minera (SQM)

Source: Bjoern Wylezich/ShutterStock.com

Another one of the top lithium stocks to buy now is Sociedad Quimica y Minera (NYSE:SQM), which currently yields about 11%. 

Technically, it’s been stuck in a channel between $45.70 and about $52 a share since the start of May. The good news is that SQM now trades at the lower range of that channel, where it has now bounced from two times prior.

Earnings haven’t been too hot. But that’s to be expected in the current environment. In its most recent quarter, SQM said revenue slipped 38% year-over-year to $1.84 billion. Net income came in 56% lower year over year to $479.9 million, as earnings per share (EPS) crumbled 56% to $1.68 year over year. However, a good amount of negativity has been priced in. Helping, Loop Capital recently raised its price target on SQM to $62, with a hold rating.

Analysts at Jefferies also upgraded SQM to a buy rating, with a price target of $62.80. “Jefferies sees SQM as an attractive investment due to several factors. These include the company’s competitive advantage in low cash cost for lithium production and the anticipated value boost from the extension of its Chilean lithium concession,” as noted by Investing.com.

Amplify Lithium & Battery Technology ETF (BATT)

Source: GrAl / Shutterstock.com

Or, we can jump into an exchange-traded fund (ETF), like the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT).

With an expense ratio of 0.59%, the BATT ETF provides exposure to global companies that develop, produce and use lithium battery technology — all for less than $10 a share. BATT ETF has 89 holdings, including Tesla (NASDAQ:TSLA), Albemarle (NYSE:ALB) and Sociedad Quimica.

Just recently, the BATT ETF ran from about $8.56 to a recent high of $9.60. From there, it did slide back to $8.97, where it again caught support. Near term, I’d like to see the ETF initially challenge $9.60 again. From there, I’d like to see it rally back to $10.60.

This is another hot ETF that could double, even triple, when lithium prices and related stocks start to push well off their low. While simplistic to say, it’s only a matter of time before lithium recovers and takes the BATT ETF along for the ride.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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