In this article, we discuss the 10 EV materials stocks to invest in. If you want to read about some more EV materials stocks, go directly to 5 EV Materials Stocks to Invest In.
Electric vehicle sales are skyrocketing across the globe as the United States and European Union outline plans to phase out combustion engines within the next few decades. According to a report by market consultant AlixPartners, the demand for EVs is accelerating in most major markets. By 2028, electric vehicle sales will represent 33% of the car sales across the globe, per the consultancy. This number could climb higher to reach more than 54% of the total car sales by 2035, the consultancy has forecast.
Compared to these forecasts, the EV share in global car sales for 2021 and the first few months of 2022 are much less overwhelming. EV sales represented just 10% of all car sales in the first quarter of 2022 and 8% of total car sales throughout 2021. As the demand for EVs rises, the firm has predicted that EV makers and supplemental industries will pour more than $526 billion on EVs and batteries between 2022 and 2026. This is more than double the previous forecast for 2020-2024 that came in at $234 billion.
Some of the top stocks expected to benefit from this boom for EVs include Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX). In addition to these firms, there are several companies that supply the raw materials needed for the manufacture of EVs, like nickel, cobalt, and copper, that will likely see a huge demand for their products as consumers shift from combustion engines.
The companies that operate in the EV materials sector and have upcoming growth catalysts were selected for the list. 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.
EV Materials Stocks to Invest In
10. Platinum Group Metals Ltd. (NYSE:PLG)
Number of Hedge Fund Holders: 5
Platinum Group Metals Ltd. (NYSE:PLG) engages in the exploration and development of platinum and palladium properties. The firm is developing the next generation of battery products using these metals. It was founded in 2000 and is based in Vancouver. It has a market cap of more than $167 million. The firm owns an interest in the Waterberg project located on the Northern Limb of the Western Bushveld complex in South Africa. The stock has lost more than 29% in value over the past few months due to falling palladium prices.
Platinum Group Metals Ltd. (NYSE:PLG) posted earnings for the third fiscal quarter on July 13, reporting a profit of more than C$108 million. The revenue over the period was C$754 million, up over 16% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Slate Path Capital is a leading shareholder in Platinum Group Metals Ltd. (NYSE:PLG), with 900,000 shares worth more than $1.2 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Platinum Group Metals Ltd. (NYSE:PLG) is one of the stocks that can benefit from the boom in the EV space.
9. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 9
Lithium Americas Corp. (NYSE:LAC) operates as a resource company in the United States and Argentina. Earlier this year, the company said that it was considering the separation of lithium operations in Argentina and the United States. Jonathan Evans, the CEO of the firm, said that the separation would accelerate the strategic objectives of the firm with dedicated focus and increased financial flexibility. The US-based firm would be a public company focused on the development of the Thacker Pass lithium project in Nevada.
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 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 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 or 71bps 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…" (click here to read more)
8. Carpenter Technology Corporation (NYSE:CRS)
Number of Hedge Fund Holders: 10
Carpenter Technology Corporation (NYSE:CRS) engages in the manufacture, fabrication, and distribution of specialty metals. The company has a solid dividend profile. Over the past three decades, it has consistently paid a dividend to shareholders. The sector median in this regard is just seven years, attesting to the solidity of the business model of Carpenter Technology. On August 12, the firm declared a quarterly dividend of $0.20 per share, in line with previous. The forward yield was 2.15%.
On September 12, Cowen analyst Gautam Khanna upgraded Carpenter Technology Corporation (NYSE:CRS) stock to Outperform from Market Perform with a price target of $45, noting that the recent pullback in the shares provides an attractive entry point for investors.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Carpenter Technology Corporation (NYSE:CRS), with 667,678 shares worth more than $18.6 million.
7. Materion Corporation (NYSE:MTRN)
Number of Hedge Fund Holders: 16
Materion Corporation (NYSE:MTRN) produces advanced engineered materials for the semiconductor, aerospace, and automotive sectors. Some of the products it markets to the electric vehicle industry in particular include advanced chemicals, microelectronics packaging, precious metals, non-precious metals, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-pure wire.
On July 6, CL King analyst David Silver initiated coverage of Materion Corporation (NYSE:MTRN) stock with a Buy rating and a price target of $95, noting the firm had a reputation as a reliable industrial supplier.
At the end of the second quarter of 2022, 16 hedge funds in the database of Insider Monkey held stakes worth $141 million in Materion Corporation (NYSE:MTRN), the same as 16 in the previous quarter worth $119 million.
6. Wheaton Precious Metal Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 27
Wheaton Precious Metal Corp. (NYSE:WPM) primarily sells precious metals. It deals in gold, silver, palladium, and cobalt deposits. The company has interests in 23 operating mines and 13 development projects. It was founded in 2004 and is based in Vancouver. On September 6, the firm declared a quarterly dividend of $0.15 per share, in line with previous. The firm has paid a dividend to shareholders over the past decade. In the past two years, these payouts have registered consistent growth as well.
On September 12 Goldman Sachs analyst Emily Chieng initiated coverage of Wheaton Precious Metal Corp. (NYSE:WPM) stock with a Buy rating and a price target of C$53, noting the recent stream acquisitions of the firm will drive stronger free cash flow generation.
At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $631 million in Wheaton Precious Metal Corp. (NYSE:WPM), compared to 28 in the preceding quarter worth $722 million.
Along with Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Wheaton Precious Metal Corp. (NYSE:WPM) is one of the stocks that hedge funds are monitoring.
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Disclosure. None. 10 EV Materials Stocks to Invest In is originally published on Insider Monkey.