The best thing about these lesser-known lithium companies is that they often trade at relatively low valuation ratios compared to their more established peers. With their projects still in the development or exploration stages, these companies may not be generating significant revenue or profits yet, which can result in depressed stock prices and valuations.
If one is already interested or invested in names such as Tesla (NASDAQ:TSLA), it would make sense to consider these companies as well. The lithium and EV industry at times show signs of strong correlation, and these names could deliver even stronger returns.
So, here are three of the best lithium stocks to buy in April.
Piedmont Lithium (PLL)
Piedmont Lithium (NASDAQ:PLL) focuses on becoming a strategic domestic supplier of lithium hydroxide for the EV and battery storage markets.
PLL is definitely one of the smaller lithium stocks, with a market cap of around $249 million at the time of writing. To me, this company sits in the sweet spot between established and speculative, offering stability and considerable capital growth potential.
In 2023, the company reported significant operational activities, including the shipping of 29,011 dry metric tons (dmt) of lithium concentrate in Q3 and its involvement in the Ewoyaa lithium project in Ghana. Financially, PLL reported a full-year revenue of $39.8 million from the sale of spodumene concentrate, with a gross profit of $5.7 million.
Looking ahead to 2024, PLL initiated cost-saving measures expected to reduce operating expenses by $10 million annually, including a workforce reduction mainly within its corporate office.
I love stocks that initiate layoffs because data shows that companies tend to outperform on both a fundamental and capital appreciation basis for their share after initiating them. PLL is one of the few companies in the lithium industry pursuing this line. That, to me, is a great reason to scoop up shares.
Atlas Lithium (ATLX)
Atlas Lithium (NASDAQ:ATLX), operating in Brazil’s Lithium Valley, has made significant spodumene discoveries.
The reason I think ATLX could be a winner is due to its outlook and dirt-cheap valuation. The company set ambitious targets for its Phase 1 annualized production, aiming to reach up to 150,000 tonnes per annum of battery-grade spodumene concentrate by Q4 2024. Furthermore, ATLX plans to increase its production capacity to 300,000 tonnes per annum by mid-2025.
It should be noted that ATLX has essentially been in the pre-revenue stage and has a significant cash burn, but its cash burn is manageable relative to its cash and cash equivalents on its balance sheet.
Still, ATLX’s valuation, at $18.63 per share, is significantly lower than its peers with equivalent spodumene production. The discount ATLX receives comes from its operational risks and other speculative features, but it could be a long-term winner for those who are risk-tolerant enough to own shares.
Arcadium Lithium (ALTM)
Arcadium Lithium (NYSE:ALTM) emerges post-merger as a leading integrated lithium chemical producer with impressive growth and profitability metrics. These are some of the reasons I think it’s one of the best lithium stocks to buy in April.
In 2024, ALTM plans significant growth in its lithium hydroxide and lithium carbonate volumes, expecting a 40% increase. That expansion follows multi-year investments, but the company intends to reduce near-term capital expenditures. ALTM projects growth capital spending between $450 and $625 million, with maintenance capital expenditure estimated at $100 to $125 million.
Financially, ALTM expects increased revenue and adjusted EBITDA based on two lithium market price scenarios without providing exact forecasts. It estimated revenue to be around $1,250 million at a lower price point and $1,900 million at a higher price point, with corresponding adjusted EBITDA of approximately $420 million and $1,000 million.
It may take some time for ALTM to extract all of the equity from its most recent merger, but once it finds the synergies that management signed up for, it could very well turn into a market leader.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.