Ben Richards from Seneca Financial Solutions shines the spotlight on the lithium sector, exploring the volatility underlining long-term positive prospects in the space despite recent price drops. He argues that current lithium carbonate prices may deter marginal suppliers and could therefore offer support from the supply side.
So what does it mean for your portfolio? Ben has the answers with his buy, hold and sell stocks in the lithium space. First up, a ‘buy’ recommendation for Canadian lithium explorer, Winsome resources (WR1).
Ben says its attractive placement involves flow-through funding arrangement and minimal shareholder dilution as benefits.
Surprisingly, Ben’s ‘hold’ recommendation goes to Pilbara Minerals (PLS), a currently undervalued company making good cash flow with a robust balance sheet.
His ‘sell’? Liontown (LTR). Ben says despite a promising start with a hefty takeover bid, the company is now perceived as being in a vulnerable position since the bid fell through.
Ben suggests that an upcoming capital raising at a large discount could compound Liontown’s problems, rendering it a risky option for potential investors. In comparison to its competitors, Liontown is perceived to offer less safety margin despite expecting stable lithium prices.