Stockchase Opinions

Brooke Thackray Lithium Americas Corp LAC-T DON'T BUY Dec 24, 2021

Hot sector. Struggled recently with its acquisition and share offering. Pulled back. Investors are not happy. Acquisition is actually losing money. Be cautious. Longer term, sector is fantastic place to be.
$36.580

Stock price when the opinion was issued

Mining
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DON'T BUY
It's a "story" stock. Has no real fundamentals. He models $4.42, so this is 89% overvalued. If this breaks below $32, it will slide and he would sell. He doesn't believe the hype or Elon Musk about lithium.
SELL
Sell. It won't stay at these levels.
DON'T BUY

The challenge with lithium is where it's located and who contols that. Namely, Chile just announced it will nationalized lithium (in the next few years). Yes, you want to be part of the EV play, but base metals aren't the way to do it. Albemarle, for instance, is too volatile.

BUY

There's intense interest in lithium as the market seeks a reliable supply of it to help build EVs. LAC is a mid-cap, so it has some stability. Shares have been bouncing with a decent base at $25. Is set up for a near-term rally. Have a decent balance sheet.

PARTIAL BUY

In the next 10-20 years we won't have enough copper or lithium as we electrify the world. The market for lithium has changed in the past 5 years. This is a long-term investment, but will see bumps along the way. Buy a little and monitor it.

WEAK BUY

Lithium is becoming more relevant with EVs, it will just take some time. Takes a lot of capital up front, to mine, and to sell. Demand/supply cycles are not always clear cut. 

WATCH

Small commodity, growing a lot. Under pressure, because lithium is under pressure with new mines coming on. It will come down to economic execution. Good assets. Be cautious in short term, as momentum is against it. Sub-$15 is a good level.

SELL

There's lithium everywhere. It's going to be an opportunity for EVs. But if you look at the price of a giant like ALB, the shares have come down, and that's just gravity taking hold of high valuations. If you need to sell, sell. Restructuring restricted share trading earlier this week.

WEAK BUY
LAC vs. LAAC

He'd probably take the North American play. Lithium market is on the verge of becoming over-, not under-, supplied. Argentinian assets are higher quality, buy still thinks NA assets will gain more favour.

DON'T BUY

Not bullish on Lithium, but company is well run. Expecting prices of Lithium to fall. Too much interest at these levels. Waiting for weakness.