With a new government strategy for increasing domestic production and a mine with a long life, analysts expect this lithium producer to grow at a rate of 27.7% next year.
Piedmont Lithium Limited (PLL)
From The National Investor
Most Americans except those who live near the historic Carolina Tin-Spodumene belt—one of the three most prolific sources of lithium, historically, in the world—could be forgiven for not even realizing such a thing exists in the lower 48. As has been the case with other metals/materials, the U.S. has in recent years shunned domestic development and production in favor of foreign supplies.
But that is going to change. The U.S. is in the process of reinvigorating domestic production and supply chains of a variety of materials; especially those deemed by the government as “strategic” materials (LITHIUM IS ON THAT LIST.)
And nobody where potential new U.S. lithium is concerned has the complete package / story going for it as does Piedmont.
Take the time ASAP to visit Piedmont’s web site and get acquainted with the company that holds the ONLY significant spodumene occurrence in the U.S.A. The existing resource Piedmont has already booked—together with a recent scoping study and other work, which the company wrapped up in an announcement on August 7—now suggests a mine life of at least 25 years (exploration upside remains as well.) World-class infrastructure is at hand as well, together with arguably the world’s best processing plants.
Especially with the increasing attention being given to all kinds of critical materials on which the U.S.'s own supply chains are vulnerable, this is going to be a BIG and growing investment theme for the foreseeable future. And there is not a company more in the cat bird seat here than Piedmont.
Piedmont’s U.S. shares especially have had wide swings the last couple years: weak in 2018 along with the sector, a big bounce earlier this year as PLL put out more news and its shares rebounded from late 2018 tax selling, and then recently back down to the $6.00 area.
With the majority of its shares trading / owned in Australia, Piedmont’s Nasdaq-listed ones are very thinly traded. Owned primarily by institutions and investors in Australia, only about 15% of PLL’s shares are traded in the U.S. as of now. Yesterday’s big move came just on a bit over 5,000 shares; not that far above the reported average of around 3,500 shares.
Characteristically, such stocks with very low “floats” seldom have a whole lot of shares at the current bid/offer price. I suspect that what happened yesterday is that a few people put in market orders who all wanted to buy; and the price they paid thanks to market makers surged. The reverse can easily happen, of course; and it will be interesting to see if anyone who bought near the recent bottom now tries to sell to make a quick buck.
Its market cap is well below 10% of its resource’s NPV.
I am adding Piedmont Lithium to my recommended list of growth-oriented stocks as a BUY. That said, though, make sure that you use a limit order when you buy some, due to these shares being so thinly traded.
Chris Temple, The National Investor, www.nationalinvestor.com, 224-308-2587, October 17, 2019