A lithium ion battery could be the next big thing in energy technology. Will it be a big thing for these stocks?
Energy is a staple in our economy, but what isn’t so certain is how it's made, stored or transported. A play on energy can be a good bet but with so many types, which play to choose? Oil is well known. Solar is growing. Hydroelectric has potential. What else?
Looking at two of the hottest stocks this past year, Tesla (TSLA) and Apple (AAPL), could help us spot a trend that some investors might overlook. Both companies are huge producers of battery-powered products. Tesla alone could account for 40% of lithium ion battery products if Model S sales continue as expected.
Batteries were hailed as a technology of the future ever since they were first designed. Some form or another of a battery has been with human society for centuries now, but almost every product you buy will have a lithium ion battery. Investors could look to benefit from a few companies postioned for growth in lithium demand.
We could of course look at the manufacturers of the batteries themselves but let’s dig deeper down the supply chain.
Chemical and Mining Company of Chile (SQM) is a massive producer of lithium based in Chile, the country with the largest lithium deposits. The company specializes in potash and lithium, which means it could withstand the test of time until lithium demands increase as expected. There have been some troubles with the company’s transparency, however, and investors might not like the stock's downward trend this year.
Lithium producers are also a little closer to home in the form of FMC Corp (FMC), whose operations are well rounded. The stock has been trading more than 17% above its 200-day moving average. Earnings will be out on Monday, and the company has grown profits an average of 19% year over year in the last few reports.
A last major lithium producer is Rockwood Holdings (ROC). The company recently made itself a bit leaner by selling off over $6 billion in operations. This will help narrow Rockwood's focus to lithium and surface chemicals for cars and airplanes. And the decision spurred a rally in the stock - it’s trading fairly near its 52-week high, which could be scary for investors who follow the buy-low, sell-high strategy.
Click here to view stock performance over time for these lithium producers.
&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;p&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;Your browser does not support iframes.&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;/p&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;
Mining is of course just the first step in making a Tesla or an iPhone run. Check back for an insight on companies that make a mean lithium ion battery themselves, and how you might be able to build a lithium portfolio of your own.
Do you see potential in these lithium-mining companies for your future holdings? Use the interactive list below to begin your own analysis.
1. Tesla Motors, Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $20.47B, most recent closing price at $173.15.
2. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets PCs, mobile devices, and portable digital music players, and sells related software, third-party digital content and applications worldwide. Market cap at $488.62B, most recent closing price at $531.91.
3. Chemical & Mining Co. of Chile Inc. (SQM, Earnings, Analysts, Financials): Engages in the production and sale of fertilizers and specialty chemicals in Chile and internationally. Market cap at $7.34B, most recent closing price at $27.90.
4. FMC Corp. (FMC, Earnings, Analysts, Financials): Provides solutions, applications, and products for agricultural, consumer, and industrial markets. Market cap at $10.14B, most recent closing price at $74.39.
5. Rockwood Holdings, Inc. (ROC, Earnings, Analysts, Financials): Develops, manufactures, and markets specialty chemicals and materials for industrial and commercial applications primarily in Germany, the United States, and Europe. Market cap at $5.09B, most recent closing price at $66.05.
(List compiled by Antonio Alfonso. Analysts ratings sourced from Zacks Investment Research, all other data sourced from Finviz. Original article published on 10/24/13.)
Analyze These Ideas: Getting StartedRead descriptions for all companies mentioned Access a performance overview for all stocks in the list Compare analyst ratings for the companies mentioned Compare analyst ratings to annual returns for stocks mentioned Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, FilingsTesla Motors, Inc. (TSLA, Chart, Download SEC Filings) Apple Inc. (AAPL, Chart, Download SEC Filings) Chemical & Mining Co. of Chile Inc. (SQM, Chart, Download SEC Filings) FMC Corp. (FMC, Chart, Download SEC Filings) Rockwood Holdings, Inc. (ROC, Chart, Download SEC Filings)
© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.
Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.
Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC.
Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.