I was examining the entire Lithium mining and battery development sector and their stock prices from various exchanges over the weekend. What i found was that most of the sector has been beat up and been seriously affected to the point that these stocks have been discounted significiantly. We all are aware these can be times that feature a lot of volatility and danger.
Companies like A123 Systems (AONE), Ener1 (HEV) and Valence Technology (VNLC) have been experiencing losses in recent weeks by as much as 30%. In fact, other companies in this sector have been under the radar for a while, has developed a successful business for decades, selling every ounce of product they’ve produced, registering record sales and production in recent news releases and still have yet to bounce back on stock prices, such as Talison Lithium (TLH.TO).
Let’s remember that we’re probably still very early in this industry’s infancy in terms of it emerging and being recognized by wall street. For example, when I looked at one of the lithium indexes, not one stock has even acheived a market cap of over a billion dollars yet. Only a few enjoy an average volume of a million shares traded on a daily basis.
More importantly, the research and development of electric vehicles and lithium storage systems to provide better battery life and range is still in progress at this time. Do consumers globally need to go through paying over $100 a barrel for months and years before finally paying attention to this new up and coming industry? I would think you’d have to learn from the past and the lessons learned. For example, you have to go through and understand the limits of a typewriter before investing in the personal computer. Or people should understand the pollution and the effects that coal power plants causes before recognizing the need for investment in alternative energy sources long term and knowing how it can benefit and improve our lifestyle in the future.
As a result, I’ve been using this opportunity to buying these stocks on weakness. Many of these stocks have great potential and may just need some time for people to recognize investment in these companies that may develop into industry blue chips in the medium and longterm.
Disclosure: I am long OTC:TLTHF.