2 juicy lithium stocks to buy and hold for the long term!

As demand for lithium increases, lithium stocks may gain value over the long term. Andrew Woods thinks he’s found two such companies to add to his portfolio.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Lithium is becoming increasingly important as more of the world aims to transition to net zero. As such, many investors are now seeking exposure to lithium stocks. What exactly are the uses for lithium? And which stocks are at the forefront of the industry? I think I’ve found two companies engaged in lithium exploration that will be good additions to my long-term portfolio. Why do these firms seem attractive? Let’s take a closer look.

What is lithium and why is it needed?

Lithium is the least dense metal that has been discovered in the world. It is primarily found in Australia, China, Chile, and Argentina.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Like many other metals, such as silver and copper, lithium has a multitude of applications. It has uses in lubricating greases and also in optics.

Its biggest use, and the reason for heightened interest in the metal, is in batteries for electric vehicles (EVs) and mobile phones.

Therefore, as a number of businesses pursue EVs, like Tesla and NIO, the demand for lithium is likely to increase. 

Alpha Lithium

The first company that interests me is Alpha Lithium (TSXV:ALLI). This is a Canada-based exploration firm. It has a 100% interest in 27,500 hectares in the ‘Lithium Triangle’ between Argentina, Bolivia, and Chile.

In February, wealth management business Echelon Wealth Partners commented on the “substantial foothold” that Alpha has in such a lucrative geographic area. 

Classifying the company as a ‘speculative buy’, Echelon placed a C$$1.80 price target on this stock. It currently trades at C$$1, up 25% in the past year. 

Furthermore, given this price target and the size of its exploration area, I think there could be great upside potential here.

As with any exploration company, however, there is no guarantee that anything fruitful will come from the zone.

Atlantic Lithium

The second business is Australia-based miner Atlantic Lithium  (LSE:ALL). This company operates across Ghana and the Ivory Coast. It currently trades at 61.6p.

Its flagship mining project is the Ewoyaa Project in Ghana. For the six months to 31 December 2021, the mineral reserve estimate at Ewoyaa increased 42% year on year. The estimate is now 30.1 metric tonnes.

The business also recently entered into an agreement with lithium hydroxide producer Piedmont Lithium. This will bring the Ewoyaa Project through to the production stage.

In addition, the company gained a licence to explore an additional 140 square kilometres of land in Ghana.

The company has a cash position that has improved from A$1.5m to A$23.3m from 2020 to 2021. Like Alpha, however, Atlantic carries the risk that its exploration activities may yield nothing profitable.

Overall, the increased demand for lithium worldwide has convinced me to gain exposure to the metal. These two companies are expanding and engaging in exciting exploration projects. While they are speculative, I think they could be good additions to my portfolio. I will be buying shares in both firms soon. 

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

Why a bear market is an investor’s best friend

A bear market can certainly be scary. But any investor tempted to sell might benefit by looking at Warren Buffett's…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

The Rolls-Royce share price could be stuck below £1 for a while. Should I buy?

The Rolls-Royce share price has been trading at penny stock levels since April. Could the stock be a bargain at…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

I’m aiming to make £45,000 in passive income with UK shares and never work again!

Investing regularly in UK shares can generate a substantial passive income over the long run. Zaven Boyrazian demonstrates how.

Read more »

Portrait of construction engineers working on building site together
Investing Articles

Down 30%, are CRH shares a screaming buy?

The CRH share price has slumped this year. Roland Head asks if this overlooked FTSE 100 share could be a…

Read more »