The 3 Most Undervalued Lithium Stocks to Buy in December
Lithium stocks continue to look particularly intriguing at the moment. Their prices remain low, mainly due to weak demand from China, the world’s largest electric vehicle market. However, the long-term outlook continues to be strong for electric vehicles and the lithium used to produce EV batteries.
Lithium prices are again approaching their pre-pandemic levels, which suggests that now may be a good time to establish a position. There are many undervalued lithium stocks to consider, but I suggest you stick with the biggest names as they tend to be more stable. All of the shares below have the potential to produce at least 50% returns in 2024.
Lithium Stocks to Buy: Lithium Americas (LAC)
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Lithium Americas (NYSE:LAC) owns the rights to what may become, in time, one of the most important lithium mines on the planet. The company continues developing Thacker Pass, the second-largest lithium deposit globally.
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The mine is located in Nevada, and the company recently separated its operations to isolate the mine for its massive potential. Investors willing to take the risk should consider buying Lithium Americas stock in November or anytime after that. The analysts covering the stock agree that it has massive potential, but the investment remains a bet. What is that bet? Basically, it’s that demand for EVs persists.
Lithium is going to be necessary for current-generation batteries and future solid-state batteries as well. So there’s little to worry about on that front. It’s not that lithium isn’t going to become obsolete. Neither are electric vehicles. They’ve already reached a critical mass based on sales volume. Furthermore, governments are subsidizing their development. The only problem with Lithium Americas is that it won’t begin producing lithium until 2026.
Piedmont Lithium (PLL)
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Piedmont Lithium (NASDAQ:PLL) stock is headed very quickly in the right direction and makes a lot of sense now. Like all other lithium firms on this and across the industry, it has been directly affected by declining spot prices for the soft metal in 2023.
A year ago, Piedmont Lithium produced no lithium at all. Fast forward a year, and the company ended up producing more than 29,011 dry tons of lithium in the quarter. Most of the sales the company is currently making are being made on the spot market, which, as mentioned, has declined drastically. The company also agreed to sell lithium earlier in the year at contracts with higher prices.
So there’s a lot to look forward to for the company. First of all, lithium prices are expected to increase since the commodity tends to go up and down and is currently down. Perhaps most importantly, Piedmont Lithium operates the largest lithium mine currently operational in North America.
Albemarle (ALB)
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Albemarle (NYSE:ALB) will always be worth a look when lithium prices fall. It’s the biggest lithium stock there is and has established a very strong position in what is still a very young industry.
Its shares haven’t been this cheap since the early stages of the pandemic. However, they continue to head in the right direction and have recently shown signs of positive momentum in early December.
The argument in favor of Albemarle is much more than that it is inexpensive at the moment and expected to rise by more than 50% moving. The argument really centers on Albemarle’s dominant position and expectations regarding supply and demand moving forward. Albemarle is the largest lithium producer globally. The company anticipates that demand will exceed production by many hundreds of thousands of tons by the year 2030. That clearly sets up a situation in which prices can continue to rise dramatically over the next few years. Thus, I believe this is one of the top lithium stocks to buy.
On the date of publication, Alex Sirois did not have (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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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