There's light volume and there's light volume yesterday SQM traded aprox 560 shares... I have to Double check but a shockingly low number. Usually volume plays a roll in my decisions.
Now will Apple develop a non lithium battery? <-- Q.
Electric cars require rechargeable batteries to hold their electricity. And rechargeable batteries require lithium for their construction -- quite a bit of lithium as it turns out. According to Tesla-watcher Electrek, just one single Tesla Model S battery contains "about 63 kg of lithium."
As Tesla builds more of its Model Ses (and Model Xes, 3s, and Ys as well), and as major automakers including Ford, General Motors, and Volkswagen gear up to follow suit, demand for lithium is bound to rise. Recently, mining consulting firm Wood Mackenzie estimated that in order to meet demand for lithium to build all the batteries that will power all the electric cars flooding the roads over the next five years, producers must increase mining output by 800,000 tons of lithium carbonate equivalent annually.
Who will produce all this extra lithium? Companies like
Albemarle (NYSE: ALB),
Livent (
NYSE:LTHM), and
Lithium Americas (
NYSE:LAC) will certainly do their part. But if you ask me, the company best positioned to supply the rising demand for lithium -- and the
best lithium stock to invest in --
is Sociedad Quimica y Minera de Chile.
Why? The answer is right there in the name:
de Chile. Chile boasts the world's largest reserves of lithium metal -- some 8.6 million metric tons of the stuff, according to website Statista.com, or three times the reserves of runner-up Australia. And Sociedad Quimica y Minera -- SQM for short -- is based in Chile. It's in the right position for times like these when lithium is in such great demand.
Mind you, at a valuation of 39.4 times trailing earnings, SQM stock is not cheap. But it is cheap-
er than rival Livent. It carries a lighter debt load than rival Albemarle, and in contrast to Lithium Americas, which has yet to establish commercial scale production, SQM is doing $1.8 billion in annual sales -- profitably -- and generating positive free-cash flow to boot. In fact, it's been free-cash flow positive every year for the past decade.
As bets on the electric-vehicle revolution go, Sociedad Quimica y Minera is one of the surest I know.
Thank you Van and Stoney for a wonderful year. Hope you all have a great Christmas!