3 Cheap Lithium Stocks to Buy Now: May 2024 

Stocks to buy

There are multiple signs that lithium prices are headed higher. It was recently determined that the lithium carbonate CIF North Asia price had reached $14,600 on May 7. That represented the highest price in almost four months — snapping up cheap lithium stocks now could boost your portfolio. Arcadium Lithium’s (NYSE:ALTM) prices of more than $20,000 per metric ton for its lithium carbonate and hydroxide sales. Barron’s believes that lithium prices will begin to stabilize soon. It also reported that the metal’s price had climbed 15% in 2024, reaching the highest level since December. I believe that many prognosticators are underestimating the demand for lithium energy-storage batteries as electricity usage rises.

For investors who want to profit from these trends, here are three cheap lithium stocks to buy now.

Arcadium Lithium (ALTM)

Source: Olivier Le Moal/ShutterStock.com

Ireland-based Arcadium Lithium was formed by the combination of Livent and Allkem earlier this year. Its average Q1 price of more than $20,000 per metric ton for its products was well above the industry average of $15,000 per metric ton. CEO Paul Graves reported that lithium prices have “stabilized at levels that are notably higher than what we saw in the last downturn.”

The firm generated net income of nearly $20 million, down from $115 million of profits in Q1 2023. However, its earnings per share came in at 6 cents, versus analysts’ average estimate of 4 cents.

Moreover, the shares have surged over 24% in the last month, while ALTM stock has a low Enterprise Value/EBITDA ratio of 10.4 times. As a result, Arcadium Lithium is certainly one of the best cheap lithium stocks to buy.

Sociedad Quimica y Minera (SQM)

Source: madamF / Shutterstock.com

Chile-based lithium miner, Sociedad Quimica y Minera (NYSE:SQM), is well-positioned to benefit from the recovery of the metal’s prices.

Last month, investment bank Jefferies raised its rating on the shares to “buy” from “hold” and its price target to $62.80 from $52. The bank anticipates SQM stock receiving a boost from the company’s low production cost and overseas expansion efforts.

Meanwhile, Sociedad Quimica y Minera has an exclusive deal to provide lithium to BYD (OTCMKTS:BYDDF), the world’s largest EV and plug-in hybrid seller in 2023.

SQM stock climbed over 6% in the last month, indicating that it has some momentum. The shares trade at a low forward price-earnings ratio of 12.6 times.

Albemarle (ALB)

Source: IgorGolovniov/Shutterstock.com

Barron’s believes that Albemarle’s (NYSE:ALB) earnings per share may exceed $8 in 2025. If its 2025 EPS reaches $8.50, that means ALB stock is changing hands at a fairly low forward price/earnings ratio of 15 times.

Keybanc expects lithium prices to jump to $21,000 — or higher, if shortages occur — in 2026 thanks to higher EV demand.

Albemarle mines hundreds of thousands of tons of lithium annually, positioning it to benefit from increased lithium prices.

Bank of America recently upgraded ALB to “buy” from “neutral” last month, citing its belief that lithium prices are bottoming. Barron’s reports that the most bullish analysts predict the shares reaching $190, up from $131.

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On the date of publication, Larry Ramer did not hold (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

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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