In this article, we will take a look at 5 of the most profitable lithium stocks to buy now. To go through our analysis of the lithium industry and its impacts on the battery and EV sectors, go directly to the 11 Most Profitable Lithium Stocks Now.
5. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Latest TTM Net Income: $2.96 billion
Number of Hedge Fund Holders: 24
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a Chilean chemical company specializing in the production of plant nutrients, iodine, lithium, and industrial chemicals. Acknowledged as one of the world’s largest lithium producers, SQM predominantly operates in the Atacama Desert, spanning the Tarapacá and Antofagasta regions, capitalizing on the region’s abundant natural resources. The company supplies derivatives and carbonates for various applications, including batteries.
Insider Monkey’s Q3 2023 research indicates that 24 out of 910 hedge funds had investments in the company. The most significant hedge fund investment in Sociedad Química y Minera de Chile S.A. (NYSE:SQM) within our database comes from Ken Griffin’s Citadel Investment Group, which holds shares valued at $70.96 million.
4. Albemarle Corporation (NYSE:ALB)
Latest TTM Net Income: $3.32 billion
Number of Hedge Fund Holders: 37
Headquartered in Charlotte, North Carolina, Albemarle Corporation (NYSE:ALB) is a specialty chemicals manufacturing company. The company is structured into three primary divisions: lithium, bromine specialties, and catalysts. Albemarle achieved prominence as the primary supplier of lithium for electric vehicle batteries by the year 2020.
On December 12, investment advisory Bank of America upgraded Albemarle Corporation (NYSE:ALB) stock to Neutral from Underperform and lowered the price target to $149 from $154.
As of the conclusion of Q3 2023, 37 hedge funds expressed optimism about Albemarle Corporation (NYSE: ALB), disclosing holdings with a total value of $274.3 million. Philippe Laffont’s Coatue Management is notably one of the leading investors in Albemarle Corporation (NYSE:ALB), holding stakes valued at $100.5 million in the third quarter.
In its Q3 2023 investor letter, The London Company, an asset management firm, highlighted a few stocks and Albemarle Corporation (NYSE:ALB) was one of them. Here is what the fund said:
“Albemarle Corporation (NYSE:ALB) – ALB underperformed due to declining lithium spot prices in the quarter. We remain attracted to ALB, reflecting its low cost position in two consolidated industries (lithium & bromine). However, we recognize quarterly results can be volatile, driven by short-term supply-demand dynamics for the underlying commodities. It is important to note that ALB’s favorable position on the cost curve means the company can likely maintain healthy profitability even at trough prices.”
3. Rio Tinto Group (NYSE:RIO)
Latest TTM Net Income: $8.59 billion
Number of Hedge Fund Holders: 27
Rio Tinto Group (NYSE:RIO) is one of the largest diversified mining companies globally, committed to exploring, mining, and processing a wide range of mineral resources. The company’s extensive portfolio includes minerals such as lithium, aluminum, copper, iron ore, diamonds, gold, borates, titanium dioxide, salt, silver, and molybdenum.
In October 2023, UBS adjusted its rating on Rio Tinto Group (NYSE:RIO), upgrading the shares from Sell to Neutral. The analysis highlighted the potential stabilization of iron ore prices within the $100 to $130 per tonne range over the next six months. This stability is anticipated to position Rio Tinto Group (NYSE:RIO) to offer attractive dividends to investors, with UBS estimating a dividend yield of 7% for the stock.
In the September quarter of 2023, among the 910 hedge funds monitored by Insider Monkey, 27 initiated positions in the company’s shares. Fisher Asset Management, led by Ken Fisher, emerged as the largest hedge fund investor in Rio Tinto Group (NYSE:RIO) with a significant stake valued at $990 million.
2. General Motors Company (NYSE:GM)
Latest TTM Net Income: $9.93 billion
Number of Hedge Fund Holders: 66
General Motors Company (NYSE:GM) is a leading multinational automotive corporation involved in the manufacturing and global distribution of trucks, crossovers, cars, and automotive parts and accessories. The company oversees prominent brands such as Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, and Wuling.
In August 2023, General Motors Company (NYSE:GM) announced its leadership role in a $60 million investment in Mitra Chem, a two-year-old company based in Mountain View, California. Mitra Chem specializes in leveraging artificial intelligence to accelerate the development of lithium-ion battery materials. This collaboration aims to assist GM in advancing iron-based cathode active materials, including lithium manganese iron phosphate (LMFP), for potential integration into some of GM’s next-generation Ultium batteries post-2025.
As of the end of the third quarter of this year, 68 out of 910 hedge funds monitored by Insider Monkey’s database had also invested in General Motors Company (NYSE:GM) shares. The most significant investor is Natixis Global Asset Management’s Harris Associates, holding a substantial $1.17 billion investment.
Patient Capital Opportunity Equity Strategy made the following comment about General Motors Company (NYSE:GM) in its Q2 2023 investor letter:
“We like other names mostly ignored by the market for similar reasons. Names like Expedia (EXPE), General Motors Company (NYSE:GM), and Delta Air Lines. These companies have strong returns on capital (14%+), good competitive positions, cheap valuations (all double-digit free cash flow yields), and are returning capital to shareholders. We trust the managements to take advantage of their depressed stock prices and create long-term shareholder value.”
1. Tesla, Inc. (NASDAQ:TSLA)
Latest TTM Net Income: $10.79 billion
Number of Hedge Fund Holders: 81
Headquartered in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA) is a multinational American company specializing in electric vehicles and clean energy solutions. Renowned for its innovative designs and manufacturing of electric cars, Tesla is a leading provider of stationary battery energy storage solutions for both household and grid-scale applications. The company also manufactures solar panels, solar shingles, and related products and services.
In the third quarter of 2023, Tesla, Inc. (NASDAQ:TSLA) achieved the production of 430,488 vehicles and delivered over 435,000 vehicles. Operating six manufacturing facilities globally, including its original plant in California and gigafactories in Nevada, New York, Shanghai, Texas, and Berlin.
According to Insider Monkey’s third-quarter database, 81 hedge funds expressed a positive outlook on Tesla (NASDAQ:TSLA), marking an increase from the 79 funds in the previous quarter. Notably, Catherine D. Wood’s ARK Investment Management emerges as a significant shareholder for the quarter, holding a stake valued at $1.02 billion.
Here is what Baron Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:
“Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.
We continue to believe that Tesla is only scratching the surface of its potential. We regard announced partnerships between Tesla and its competitors in the quarter as important. In early June, Tesla agreed to provide Ford Motors access to Tesla’s electric vehicle (EV) charging technology and network. Other traditional and pure EV manufacturers, including General Motors, Rivian, and Volvo, quickly followed suit. We expect additional charging partnerships to ensue. In our view, these relationships validate Tesla’s charging technology and infrastructure as superior to other standards. Consolidation around a single technology should accelerate charging infrastructure deployment, diminish the risk of Tesla’s technology becoming obsolete, and lessen a key concern of hesitant EV purchasers. EV adoption is at a tipping point. And Tesla, with its approximately 60% domestic market share of EVs, should be the most important beneficiary of this shift…” (Click here to read the full text)
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