Albemarle Corp (ALB-N)

UBS predicts EV sales will rise 30-35% in China this year. If this trend holds true, then China’s demand should offset any weakness in lithium prices. Also, Albemarle’s PE of 11.24x now has risen from 9.4x to start the year, but is historically reasonable considering the media average over five years is 30.85x. Read: PDAC special: minerals for our full analysis.

Just bought it. They own some of the cheapest lithium in the world. They're restructuring their contracts this year, which should boost prices by 25%. It's a long-term global story because EV sales continue to grow. ALB is increasing capacity over the next 8 years.

(A Top Pick March 21/17. Up 7.88%.) This had a wonderful run, running to $144. He runs Stop/Losses on his positions, and got taken out at $130. The lithium stocks were wonderful performers last year. They've had some correction recently, and there has been some discussion about more supply coming into the market.

The largest producer of lithium. When we talk about electrification, electric vehicles, more tablets, smart phones, etc. lithium batteries are going to be in relatively high demand. Demand growth is forecast to be 10% a year for the next decade, and that is even using some relatively conservative assumptions about electric vehicle penetration. Given that this is the largest producer and a very low-cost producer, they should be able to bank very significant cash flow over the course of the next 5-10 years, but governments can very significantly influence adoption. Dividend yield of 0.9%. (Analysts’ price target is $137.)

(A Top Pick Oct 3/16. Up 35%.) This is firing on all cylinders. The lithium market is a market that is underappreciated, both from the constraint/supply side and the expectations on the demand side. Lithium is very much an Asian story, and probably is why this company has been undervalued for quite some time. Still a Buy.

The dominant player in lithium. He believes we are going to continue to see movement to electric cars. The company makes both types of lithium that go into all the major batteries that are being sold. They’ll triple production over the next 5 years. Model 3 is about to come from Tesla. They are becoming mass market and as you run into the beginning of a mine production, share prices tend to do well. It has twice the margin that Tesla will ever have. This will be a growth stock for many years, and they think they can maintain 50% of the market. Dividend yield of 1.2%. (Analysts’ price target is $115.00.)

(A Top Pick June 28/16. Up 20.83%.) Lithium. Last quarter they completed the transaction of one of their processing plant businesses in China, so they have a little bit of a war chest now, and he expects them to go out and buy a lithium producers, possibly in Australia. He still likes this and feels the price of lithium will continue to go up as the demand for electrification continues. Still a Buy.

(A Top Pick June 28/16. Up 8.70%.) A company that is transitioning from almost a specialty chemical type of area into lithium. Lithium has been one of the hot sectors in the mining world, and there have been countless numbers of lithium companies showing up on the TSX, but this is the largest and the best positioned. Since he recommended this, they have bought a processing plant to convert the lithium carbonate into its commercial form in China.

This is his long-term story. Lithium and the electrification of everything has real staying power. They sold a good chunk of their specialty chemical side off a couple of quarters or so. Expects them to continue to invest primarily in lithium brines, but also processing. Dividend yield of 1.44%.