12 Best Lithium And Battery Stocks To Buy Now

Published on March 10, 2023 at 3:50 pm by Omer Farooq in Hedge Funds, News

In this article, we will look at the 12 best lithium and battery stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Lithium And Battery Stocks To Buy Now.

Global EV Sales Grew By 68% Year Over Year

The EV industry is growing at a remarkable pace. According to WSJ, 7.8 million units of all-electric vehicles were sold across the globe in 2022, up 68% year over year, and accounted for roughly 10% of global car sales. China, Europe, and the U.S. were the leading regions that experienced growth in EV sales. In 2022, all-electric vehicles made up for 19% of total car sales in China, followed by 11% in Europe, and 5.8% in the United States.

EV Price War

While electric vehicles have gained tremendous popularity in recent years due to their eco-friendly nature and governments’ efforts to combat climate change, a major headwind for electric vehicles is still costs. Batteries account for a major chunk of the price of an electric vehicle. On average, batteries account for about one-third of the total cost of an electric vehicle. However, advancements in battery technology and optimization of manufacturing processes is now allowing major automakers to cut costs of their EVs. In January 2023, Tesla Inc. (NASDAQ:TSLA) initiated an EV price war after the auto giant announced that it is slashing prices of its electric vehicles by 20% across the globe. This move triggered Ford Motor Company (NYSE:F) to rival the EV giant by announcing price cuts for its all-electric Mustang Mach E.

Why Care About Lithium and Battery Stocks?

As car manufacturers continue to pour hefty investments into battery technology to cut production costs and make their products more accessible to consumers, lithium and battery stocks are well-positioned to soar. The global lithium market is on track to reach a value of $22.6 billion by 2030, according to ReportLinker, and the global EV battery market is expected to be worth $84.5 billion by 2030.

With growing EV sales and increasing competition among manufacturers to cut EV prices, lithium and battery stocks are becoming attractive investment options. Some of the top lithium and battery stocks that are popular among elite money managers include Sociedad Quimica y Minera (NYSE:SQM), FREYR Battery (NYSE:FREY), Albemarle Corporation (NYSE:ALB). Let’s now discuss these stocks, among others, in detail below.

Photo by Mika Baumeister on Unsplash

Our Methodology

To determine the best lithium and battery stocks to buy now, we sifted through lithium and battery ETFs and compiled a list of pure-play EV battery and lithium stocks. We narrowed down our selection to stocks that were the most popular among hedge funds. We have ranked these stocks in ascending order of the number of hedge funds that have stakes in them.

Best Lithium And Battery Stocks To Buy Now

12. Piedmont Lithium Inc. (NASDAQ:PLL)

Number of Hedge Fund Holders: 11

Piedmont Lithium Inc. (NASDAQ:PLL) is involved in the exploration and development of lithium projects in the United States. The company is developing 4 lithium projects currently in North Carolina, Tennessee, Ghana, and Quebec, and is on track to become one of the largest lithium hydroxide producers in the United States.

This March, Macquarie analyst Hayden Bairstow started coverage of Piedmont Lithium Inc. (NASDAQ:PLL) with an Outperform rating and a $140 price target. As of March 9, the stock has gained 32.44% year to date and is one of the best lithium and battery stocks to buy now.

At the end of Q4 2022, 11 hedge funds held stakes in Piedmont Lithium Inc. (NASDAQ:PLL). The total value of these stakes amounted to $31.6 million.

Top stocks that will benefit from growing EV adoption include Piedmont Lithium Inc. (NASDAQ:PLL), Sociedad Quimica y Minera (NYSE:SQM), FREYR Battery (NYSE:FREY), and Albemarle Corporation (NYSE:ALB).

11. Sigma Lithium Corporation (NASDAQ:SGML)

Number of Hedge Fund Holders: 11

Sigma Lithium Corporation (NASDAQ:SGML) is another leading lithium mining company, based in Brazil. At the end of the fourth quarter of 2022, 11 hedge funds were long Sigma Lithium Corporation (NASDAQ:SGML) and disclosed positions worth $54.9 million in the company. This is compared to 8 hedge funds in the preceding quarter with stakes worth $45.5 million. The hedge fund sentiment for the stock is positive.

This January, BMO Capital analyst Joel Jackson took coverage of Sigma Lithium Corporation (NASDAQ:SGML) with an Outperform rating and a $40 price target.

As of March 9, Sigma Lithium Corporation (NASDAQ:SGML) has gained 208.52% over the past 12 months. Sigma Lithium Corporation (NASDAQ:SGML) is ranked among the best lithium and battery stocks to buy now.

As of December 31, Potrero Capital Research is the most prominent investor in Sigma Lithium Corporation (NASDAQ:SGML) and has disclosed a position worth $14 million in the company.

10. Microvast Holdings, Inc. (NASDAQ:MVST)

Number of Hedge Fund Holders: 12

Microvast Holdings, Inc. (NASDAQ:MVST) is an American battery manufacturing company. The company is involved the in the design and development of battery systems for electric vehicles and energy storage systems, as well as battery component including anodes, cathodes and electrolytes.

In December 2022, Microvast Holdings, Inc. (NASDAQ:MVST) secured a contract from a U.S. customer to provide a utility-scale battery energy storage system.

At the close of the fourth quarter of 2022, Microvast Holdings, Inc. (NASDAQ:MVST) was held by 12 hedge funds. These funds held collective positions worth $24.7 million in the company. This is compared to 11 hedge funds in the previous quarter with stakes worth $24.1 million. Microvast Holdings, Inc. (NASDAQ:MVST) is one of the best battery stocks to buy now according to hedge funds.

In addition to automakers Tesla Inc. (NASDAQ:TSLA) and Ford Motor Company (NYSE:F), battery stocks such as Microvast Holdings, Inc. (NASDAQ:MVST) are also well-positioned to capitalize on the growth trends of the EV industry.

9. Lithium Americas Corp. (NYSE:LAC)

Number of Hedge Fund Holders: 14

Lithium Americas Corp. (NYSE:LAC) is a lithium mining company with operations in the United States and Argentina. On March 2, Lithium Americas Corp. (NYSE:LAC) began construction at its Thacker Pass lithium project in Nevada. As of March 9, the stock has gained 21.70% year to date.

On March 8, PI Financial analyst Justin Stevens took coverage of Lithium Americas Corp. (NYSE:LAC) with a Buy rating and a C$40 price target. Stevens noted that the company is offering an attractive opportunity” to investors looking for investing in domestic production of battery-grade lithium.

At the end of Q4 2022, 14 hedge funds were bullish on Lithium Americas Corp. (NYSE:LAC) and held collective stakes worth $120.8 million in the company. The stock is placed ninth among the best lithium and battery stocks to buy according to hedge funds.

As of December 31, Himension Capital is the leading investor in the company and disclosed a position worth $58 million.

Here is what Massif Capital had to say about Lithium Americas Corp. (NYSE:LAC) in its Q4 2022 investor letter:

“Our final pre-production mining firm in the portfolio is Lithium Americas Corp. (NYSE:LAC). We have been invested in Lithium America since January 2020, with an average price of roughly $2.8 per share. Interestingly enough, as a result of successfully trading options around our core position, we have generated options premium per share of $2.03, so our effective cost of ownership is $0.77. The shares are currently trading for $20.72, an unrealized return of 2,590%, although it is worth noting that the stock got as high as $38.94 per share, a 4,957% return.

In retrospect, we probably misplayed this. When the stock peaked at $38 per share in February/March 2022, we believed the firm, in the fullness of time, could be worth as much as $46 per share, an additional 21% return. At the same time, we felt that the stock had run well ahead of itself; after all, we believed it could be worth $46 per share with two mines operating, not when it was pre-production at two mines…” (Click here to read the full text)

8. EnerSys (NYSE:ENS)

Number of Hedge Fund Holders: 17

EnerSys (NYSE:ENS) is a leading American battery manufacturing and energy solutions company, headquartered in Pennsylvania. On February 8, the company posted earnings for the fiscal third quarter of 2023. The company reported an EPS of $1.27 and outperformed EPS estimates by $0.04. The company’s revenue for the quarter amounted to $920.20 million. EnerSys (NYSE:ENS) is one of the best lithium and battery stocks to buy now and has gained 30.82% over the past 6 months.

Over the past 3 months, EnerSys (NYSE:ENS) has received 2 Buy ratings from Wall Street analysts. The stock has an average price target of $99.50, which represents an upside of roughly 14.5% from current levels.

EnerSys (NYSE:ENS) was a part of 17 investors’ portfolios at the end of Q4 2022. These funds held collective stakes worth $299.6 million in the company, up from $251.2 million in the preceding quarter with 18 positions. As of December 31, Scopia Capital is the leading investor in EnerSys (NYSE:ENS) and has a stake worth $77.2 million.

Here is what Vulcan Value Partners had to say about EnerSys (NYSE:ENS) in its Q4 2022 investor letter:

“EnerSys (NYSE:ENS) is a global leader in stored energy solutions for industrial applications. It supplies motive power batteries for trucks and forklifts, specialty batteries for satellites and military equipment, battery chargers, power converters and distributors, and outdoor equipment enclosures, amongst many other products and systems. Over the past three years, the business faced COVID-19 lockdowns, inflationary cost increases, and restricted access to the critical product components needed for its more complex, higher return products. On its most recent quarterly earnings call, management was confident the business had finally worked past many of these issues and expressed optimism that costs were beginning to level off, supply chain issues were easing, and EnerSys could resume converting its backlog into revenue. The stock price responded favorably to the quarterly results and management’s comments, and we continue to see plenty of opportunity for sequential improvement ahead.”

EV stocks that are on both analysts’ and investors’ radars include EnerSys (NYSE:ENS), Tesla Inc. (NASDAQ:TSLA), and Ford Motor Company (NYSE:F).

7. Solid Power, Inc. (NASDAQ:SLDP)

Number of Hedge Fund Holders: 18

Solid Power, Inc. (NASDAQ:SLDP) is involved in the development and manufacturing of solid state battery technologies for electric vehicles. At the end of the fourth quarter of 2022, Solid Power, Inc. (NASDAQ:SLDP) was spotted on 18 hedge funds’ portfolios that disclosed collective positions worth $11.5 million in the company. The stock is placed seventh on our list of the best lithium and battery stocks to buy now according to hedge funds.

On February 28, Solid Power, Inc. (NASDAQ:SLDP) reported strong earnings for the fiscal fourth quarter of 2022, in which it beat EPS estimates by $0.10. The company’s revenue for the quarter amounted to $4.20 million, up 302.49% year over year and ahead of expectations by $3.57 million.

On March 8, Needham analyst Chris Pierce started coverage of Solid Power, Inc. (NASDAQ:SLDP) with a Buy rating and a $5 price target.

As of December 31, Yaupon Capital is the top investor in the company and has disclosed a position worth $2.6 million.

6. QuantumScape Corporation (NYSE:QS)

Number of Hedge Fund Holders: 21

QuantumScape Corporation (NYSE:QS) is an emerging and innovative battery manufacturing company, based in California. The company is involved in the development and commercialization of solid state lithium metal batteries for electric vehicles. As of March 9, the stock has returned 35.56% to investors year to date. QuantumScape Corporation (NYSE:QS) is one of the best lithium and battery stocks to buy according to hedge funds.

At the close of Q4 2022, 21 hedge funds held stakes in QuantumScape Corporation (NYSE:QS). The total value of these stakes amounted to $39.5 million. As of December 31, Jonathan Soros’ JS Capital is the largest shareholder in QuantumScape Corporation (NYSE:QS) and has disclosed a position worth $11.5 million in the company.

Some of the most widely-held lithium and battery stocks by elite money managers include QuantumScape Corporation (NYSE:QS), Sociedad Quimica y Minera (NYSE:SQM), FREYR Battery (NYSE:FREY), and Albemarle Corporation (NYSE:ALB).

Click to continue reading and see 5 Best Lithium And Battery Stocks To Buy Now.

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Published on December 13, 2024 at by Inan Dogan, PhD

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Published on November 16, 2024 at by Insider Monkey Staff

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