Sunday, January 11, 2015

Beyond Tesla: The Huge Profit Potential of Lithium

By Tony Sagami

One of the stocks that I get the most questions about is Tesla. I’m not sure whether investor interest is due to the gorgeous lines of the Tesla Model S, its amazing high performance engine, the high flying stock, or the energy saving nature of all electric vehicles….. but Tesla is a very popular subject.

Tesla cars don’t just look fast; they are fast! The Tesla Model S can go from 0 to 60 mph in a stunning 5.9 seconds and travel up to an impressive 319 miles on a single charge.

The Tesla Model S is shockingly modestly priced by luxury car standards. The basic model has a MSRP of $69,900, but the price tag can quickly escalate to $100,000 with optional add ons. Of course, a cheapskate like me would never pay that much for a car—even an electric car—but lots of status-conscious consumers have.

And you won’t see me buying Tesla stock either. Even though it’s well off of its 52 week high, it’s still trading for almost 80 times earnings and 29 times book value.

However, a lot of technology is incorporated into electric vehicles. The most profitable way to invest in electric vehicles is not through Tesla stock, but instead from the industry that makes batteries possible.
I’m talking about lithium, one of the most valuable natural resources of the new electronic world thanks to its unique and extremely valuable characteristics:

  • Lithium has such a low density that it floats on water and can be cut with a butter knife. And when mixed with aluminum and magnesium, it can form lightweight alloys that produce some the highest strength to weight ratios of all metals.
  • Lithium tolerates heat better than any other solid element, melting at 357°F.
  • Lithium batteries offer the best weight-to-energy ratio, making lithium batteries ideal for any application where weight is an issue, such as portable electronics.
  • That same high energy density and low weight characteristic makes lithium batteries the best choice for electric/hybrid vehicles due to car gas mileage. A car’s biggest enemy is weight.
  • Lithium has a very high electrochemical potential, meaning that it has excellent energy storage capacity.
Lithium is a key mineral of the future, but there are limited ways to invest in it because unlike other commodities, there is no vehicle to invest in the physical metal.

On top of that, few options exist to invest in it because the market is dominated by only a handful of producers: Chemical & Mining Company of Chile (SQM); FMC Corp. (FMC); Rockwood Holdings (ROC); and privately held Talison Lithium.

The Chemical & Mining Company of Chile is primarily a potash fertilizer company; FMC Corp. is a diversified chemical producer with a less than 15% of its revenues from lithium; and Talison is a privately held Chinese company.

That leaves Rockwood Holdings as the purest play on lithium by a wide margin, with close to a 50% share of the global lithium market. It’s the OPEC of lithium. It’s also trading around $80 a share right now… a lot cheaper than Tesla—the car and the stock!

Of course, timing is everything, so I’m not suggesting that you rush out and invest in lithium or any of the above stocks tomorrow morning. Instead, wait for my buy signal in Just One Trade.
Tony Sagami
Tony Sagami

30 year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.

To learn more about Rational Bear and how you can use it to benefit from falling stocks and sectors, click here.

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Saturday, July 6, 2013

World's First Solar Powered Family Car to Compete

The Solar Team Eindhoven (STE) of Eindhoven University of Technology presented the world's first solar powered family car. "Stella" is the first "energy positive car" with room for four people, a trunk, intuitive steering and a range of 373 miles. This is the car being entered by the student team in the Cruiser class of the World Solar Challenge that starts in Australia in October 2013.

Everything you need to create your own Solar Energy!

Thursday, March 21, 2013

Students Battle it out in the Eco Marathon

We follow three student teams across the Americas, capturing their trials and tribulations as they prepare for Shell Eco-marathon in Houston, Texas, USA. In the first episode find out why Canada's AlĂ©rion Supermileage team is struggling in their determination to regain victory. See why the Let's do it again team in the USA must step up the pace and uncover the tensions within the e³- USFC team in Brazil. These innovative engineers of the future will soon do battle in ultra energy efficient cars.

Wednesday, January 23, 2013

Qatar Prepares for Carbon Neutral World Cup

Chevron is helping the nation of Qatar meet its pledge to host a carbon-neutral FIFA World Cup in 2022. The Chevron Center for Sustainable Energy Efficiency at the Qatar Science & Technology Park supports research, demonstration and training in solar power and energy efficiency.

A solar test site adjacent to the center is testing 25 different solar panels to find the technology best suited to weather conditions in the region. Watch how Chevron and Qatar are researching innovative ways to reduce the carbon footprint for the 2012 World Cup soccer tournament.

For more about energy efficiency at Chevron, visit Chevron Energy Issues or visit more Chevron Human Energy Stories.

Wednesday, January 2, 2013

How Battery Energy Storage Can Improve Overall Performance of the Grid

Battery energy storage technology is rapidly advancing to meet critical challenges of the grid, including growing demand, aging infrastructure and system constraints. In this video, Teresa Hanson, editor in chief of PowerGRID International and EL&P interviews a battery energy storage specialist on how these systems are becoming a practical, viable solution to improving overall performance of the grid.

Friday, December 21, 2012

Hanna Fathi: Powerland Cairo... Trash talking

Hanna Fathi of Cairo shows us a way to put waste to work using garbage and cow manure to make menthane gas.

Saturday, December 8, 2012

Great Idea or Big Polluter....BioLite's CampStove Invention

Mad Money host Jim Cramer speaks with BioLite's CEO Jonathan Cedar and its Chairman John Levy, about its latest "CampStove" product.

Monday, September 10, 2012

Is the Dream of Investing in Solar Still Alive?

Charles Yonts, Head of Sustainable Research, CLSA discusses the demand for solar energy and the role of alternative energy post the Fukushima disaster.

Saturday, September 8, 2012

Facts About Minimum Acceptable Voltage Levels

Learn about conservation voltage reduction and distribution feeder optimization. Varying voltage levels on feeder lines can be a problem for utilities and their customers. Discover the technologies necessary for utilities to optimize voltage levels on the grid, reduce CO2 emissions, save energy and satisfy customer needs for years to come. Click here to download ABB white paper, Smarter grids are more efficient.