10 Oversold Canadian Stocks to Buy Right Now

8) Lithium Americas (Argentina) Corp. (NYSE:LAAC)

% Decline Over Past Year: ~39%

Forward P/E (As of October 21): 13.47x

Number of Hedge Fund Holders: 8

Headquartered in Vancouver, Canada, Lithium Americas (Argentina) Corp. (NYSE:LAAC) is engaged in providing specialty products essential to low-carbon economies and achieving global net-zero greenhouse gas (GHG) emissions.

Lithium Americas (Argentina) Corp. (NYSE:LAAC)’s strategic priorities focus on the successful ramp-up of production at the Cauchari-Olaroz project, achieving full capitalization, and accelerating regional development plans in collaboration with its partner, Ganfeng Lithium. Market experts believe that the Cauchari-Olaroz project, which is located in Argentina, is Lithium Americas (Argentina) Corp. (NYSE:LAAC)’s most important asset and is central to the growth strategy.

This JV is focused on capitalizing on the elevated global demand for lithium, fueled by the expanding EV market and the growing need for energy storage solutions. As of mid-2024, Lithium Americas (Argentina) Corp. (NYSE:LAAC)’s goals consist of running the plant to identify critical issues and then scaling back operations in a bid to focus on quality and reliability. Post this, it plans to implement process and equipment improvements before it ramps up production again.

The success of Lithium Americas (Argentina) Corp. (NYSE:LAAC) revolves around its ability to ramp up production efficiently while, at the same time, securing favorable offtake agreements amidst competition. Wall Street analysts expect a recovery in lithium prices in the medium term, which should benefit Lithium Americas (Argentina) Corp. (NYSE:LAAC) as it increases production volumes. Reaching full production capacity is expected to result in substantial improvements in financial performance.

Notably, increased production volumes, along with the expected recovery in lithium prices, should fuel Lithium Americas (Argentina) Corp. (NYSE:LAAC)’s revenue growth and margin expansion. This will result in achieving positive earnings and cash flow, improving financial stability, and reducing its dependency on external funding.