Undervalued lithium stocks present a lucrative opportunity for long-term investors. Given the rise of battery demand over time, commodity supply/demand fundamentals should move into profitable territory for investors. Accordingly, for those who are betting on continued strong demand for lithium, mining stocks are a great place to look to invest.
Of course, finding attractively-valued lithium mining stocks is the key. In that regard, this sector is a difficult one to traverse with valuations spanning a wide range right now.
That said, there are plenty of stocks that offer substantial upside, particularly if lithium demand remains red-hot over the medium-term. Here are three of my top picks in this space right now.
Albemarle (NYSE:ALB) is best-known as a leading chemical manufacturer, but the company also has substantial lithium mining operations. As the largest supplier of lithium for electric vehicle batteries, Albemarle has a strong foothold in the growing EV market. With impressive financials and strong management, Albemarle demonstrates consistent growth and efficient profitability. Increasing demand for lithium and specialty chemicals is expected to drive the market to reach $1 trillion by 2030, benefiting Albemarle and its investors immensely.
Additionally, since Albemarle is a leading global provider of lithium for electric vehicle batteries, it’s also a top way to play EV growth over the long-term. For those looking to play the EV sector but don’t like the valuations of EV producers right now, this is a great “picks and shovels” play in this space.
Despite facing challenges in 2022, Albemarle’s stock has shown a strong recovery this year with a 14% increase since January. Over the past five years, the stock has experienced significant growth, rising by 155%. Given its current performance, Albemarle stock presents an attractive investment opportunity for momentum investors and long-term holders alike.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) has experienced substantial stock gains, with an 18% increase this year and a remarkable 306% rise over the past five years. Currently, the company focuses on developing lithium mining projects in Argentina and Nevada and is actively involved in supplying lithium for electric vehicle batteries. Lithium Americas has secured an agreement with General Motors (NYSE:GM) to supply raw lithium from its extraction projects.
While the company is currently unprofitable and generating limited revenue, it anticipates significant opportunities in the growing demand for lithium batteries as the world shifts to electric vehicles. With its aim to become a low-cost lithium producer for the automotive industry, LAC stock appears to be an attractive investment opportunity.
With its Thacker Pass mine partnership with General Motors, the company is poised to generate revenue from lithium deliveries starting in 2026. The recent milestone of producing lower-than-battery-quality lithium carbonate at the Caucharí-Olaroz project adds to its positive trajectory. Furthermore, the acquisition of Arena, which holds a majority stake in the Sal de la Puna project, strengthens Lithium Americas’ position in the industry.
American Lithium (AMLI)
American Lithium (NASDAQ:AMLI) stands out as an intriguing investment opportunity with its affordable stock price of $2 per share. The company boasts two noteworthy lithium projects: the TLC Lithium Project in Nevada and the Falchani Lithium Project in Peru, a substantial lithium deposit ranked sixth-largest globally.
Additionally, American Lithium has made an investment in Surge Battery Metals, acquiring a 9.7% stake. This investment, paired with the the company’s recent milestone of obtaining drilling permits near Quelcaya, signals progress for the company. With support from Peru’s new government and exploration prospects in the Macusani Plateau, AMLI presents an attractive and affordable opportunity in the lithium market.
On the date of publication, Chris MacDonald 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.