With EV stocks and other renewables in the spotlight finding the best battery stock picks can be tough.
September is historically the worst month for markets. Since 1928, the S&P 500 has fallen by a median of 0.42% during the month. It has provided positive returns just 44.7% of the time dating back nearly a century.
That isn’t all of the bad news, though. During years in which the S&P has been down through August, it has fallen by an average of 3.4% in September.
That said, this September has thus far proven to be an anomaly. Through Sept. 8, it was up 2.01%. That’s a very encouraging sign given past precedents that suggested it is more likely to falter.
These are the battery stock picks to help investors beat what has traditionally been a month of slumping markets.
|Sociedad Quimica y Minera de Chile
Albemarle (NYSE:ALB) easily is one of the best battery stock picks. The Charlotte, North Carolina company is a leading lithium producer and a well-known, stable choice for investors.
Albemarle has established a leading position in the new automobile economy that is set to heavily feature EVs. In other words, it’s a picks and shovels play on continued EV growth.
ALB stock has had a particularly strong 2022. It is up 23% at the time of writing while the S&P 500 remains off by 16.5% during the same period.
September has seen much of the same for Albemarle, which is up nearly 11%, having risen from $260 to $290.
At the end of August, the company announced a corporate restructuring intended to better capitalize on lithium demand. The market has responded positively to the news which followed a strong earnings report.
Freyr Battery (FREY)
FREYR Battery (NYSE:FREY) stock should find a welcome audience with green investors. The company develops high-density, cost-competitive lithium-ion batteries.
The company’s operations are fuelled by hydro and wind energy which give it something of an edge for the truly green investor. Add to that, its roots in Norway and HQ in Luxembourg and its green credentials really add up, making it one of the best battery stock picks for the long term.
Those credentials are reflected in a target price that possesses 55% upside over the current $12.50 price. FREYR Battery also possesses a unanimous ‘buy’ rating.
The good news is that FREY stock is underpinned by strong results in the most recent quarter. The company reported a net income of $4.7 million, up from an $8.036 million net loss a year earlier.
Sociedad Quimica y Minera de Chile (SQM)
As you may have guessed by its name, Sociedad Quimica y Minera de Chile (NYSE:SQM) is a mining stock, but that doesn’t mean it’s not among the best battery stock picks. The company has more diversified operations than Albemarle with both firms considered battery stocks because of lithium mining.
And like ALB stock, SQM stock has performed strongly in 2022. In fact, it has more than doubled, rising from $50 to above $110.
That strong price appreciation is a product of rapidly increasing lithium and derivatives sales. Sociedad Quimica y Minera de Chile has increased those revenues by a massive 1,033% in Q2 YoY and 1,004% in H1 of this year.
The company is a prime example of what can occur when rapidly rising demand meets rising production.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) stock hasn’t proven as profitable as the other lithium mining stocks on this list in 2022.
However, it remains slightly up this year which is a feat in and of itself. Despite the fact that other lithium stocks have performed better, LAC stock does possess strong upside, arguably more so than the other best battery stock picks we’ve covered.
The Vancouver-based firm is developing three lithium mining projects. Two of which are located in Argentina with the other in Nevada.
The company does not yet produce any lithium. That said, shares currently trade for $31 and LAC stock carries a target price of $35. That strongly suggests that investors fully believe that the company will mine significant amounts of lithium.
The company continues to explore a separation of its U.S. and Argentina operations. If done, that could make its U.S.-based operations particular;y attractive as Thacker Pass, where the operations exist, is the largest known lithium resource in the U.S.
I have to admit it, I like the narrative behind QuantumScape (NYSE:QS). The company ended up much-maligned following its IPO in late 2020. By early 2021 a short seller report by Scorpion Capital sent the firm’s shares tumbling downward.
At that point, many investors were likening the fledgling solid-state battery manufacturing upstart to a house of cards. It seemed the company was headed for disaster. Fast forward seven months and QuantumScape has proven critics wrong.
By November the company had released 10-layer battery cell testing data showing 800 cycles at better than 1-hour charge rates at 25 degrees celsius. That meant QuantumScape achieved the primary goal it laid out for itself quicker than anticipated only months after serious allegations were leveled against it.
Ganfeng Lithium (GNENF)
Simply put, Ganfeng Lithium (OTCMKTS:GNENF) stock has massive upside.
The Chinese lithium producer’s stock trades at $8.30 at the time of writing. However, its target price is $87.32. The company is attempting to be all things to everyone within the lithium supply chain.
Ganfeng Lithium’s operations span the gamut from raw material production, to chemical refining, to battery manufacturing and storage, through to recycling.
The firm’s most recent earnings report shows impressive numbers. Those numbers include operating income that rose by 234% leading to net profits which increased by 956%.
Those earnings were unaudited which may explain why GNENF stock remains underpriced.
The reason to consider investing in Panasonic (OTCMKTS:PCRFY) stock is that the company is a massive supplier of EV batteries.
Panasonic has shipped more than 6 billion EV battery cells out of its Nevada site that serves Tesla’s (NASDAQ:TSLA) gigafactory in the state.
And in July the company announced plans to build a $4 billion battery manufacturing facility in Kansas. So, Panasonic should logically remain integral to the continued development of the U.S.EV sector.
PCRFY stock has slumped from above $11 to begin 2022, to below $8 currently. Analysts believe it should trade above $10. As EPS estimates continue to stabilize that looks increasingly possible.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.