One of the key points of tension in the ongoing conflict over the tech market between the U.S. and China is control over the supply of raw materials like lithium, which are used in the production of lithium-ion batteries. With the increasing expansion of the EV market especially, establishing a domestic supply chain for lithium is a big goal for the United States – so much so that there’s a whole section of the Inflation Reduction Act devoted to tax breaks and other incentives to help make that happen.
That means it’s a good time to go looking for opportunities in this sector, especially if you can find a company that other investors are overlooking for whatever reason. And it so happens that one of the biggest and most profitable lithium providers in the world is currently almost 40% down from its 52-week high.
Remember, it’s not always a portent of doom for a business when the stock price takes a bit of a beating, and if the company is solid, buying when it’s at a discount like this can lead to serious gains as it pushes back up to its prior highs.
And this company definitely checks all the boxes. I’m talking about a whopping 40.55% profit margin on $9.66 billion in trailing 12-month revenue. Year-over-year quarterly revenue growth of 60.2%. $3.92 billion in net income available to common shareholders. You don’t often see a bill of health that looks this good from a company of this size – $23 billion market cap.
And there’s a catalyst coming as they reap the benefits of those government incentives I mentioned before. This company is getting ready to double its lithium capacity in the United States with an expansive new facility in South Carolina, in throwing distance of major auto manufacturers where it can easily serve their EV-related demands.
Check out the video for the ticker:
— Shah Gilani
Source: Total Wealth