Stocks to buy

3 Battery Sleeper Stocks to Buy Before Wall Street Wakes Up

As the electrification trend picks up steam, investors have a range of options to sift through for growth. There’s electric vehicle manufacturers, renewable energy providers, battery stocks, and a host of other service-related businesses tied to this sector. Within the electrification trend, I think a few battery sleeper stocks may be worth considering above all others.

Battery technology has improved dramatically in recent years, thanks in part to global efforts to mitigate climate change. As battery technology improves, more facets of our daily lives can be electrified. Accordingly, various battery-related companies can provide the kind of sustainable long-term growth investors may be looking for.

That said, not all battery stocks are the same. In fact, there are a wide range of companies to choose from. Here are three of the top battery sleeper stocks I think may be worth a look right now.

NEE NextEra Energy $81.80
LAC Lithium Americas $26.80
QS QuantumScape $9.32

NextEra Energy (NEE)

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One of the top battery sleeper stocks to consider is NextEra Energy (NYSE:NEE). This energy utility company is a mega-cap stock, with a market capitalization of around $160 billion. Thus, this is the big dog in many facets of energy transmission and production.

NextEra produces a mix of renewable and non-renewable electricity. Among the business lines NextEra has focused on in terms of investment is its battery storage business. The company plans to own a significant amount of market share in the battery storage market, focusing on developing various battery technologies. One of the unique projects the company recently put into play is the world’s largest solar-powered battery.

As the need for energy storage increases, NextEra stands ready to handle the burden. This is a company with solid fundamentals and impressive long-term growth prospects. For those looking for a mega-cap battery sleeper stock, this is certainly one to consider.

Lithium Americas (LAC)

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A Canada-based battery-related stock to make the list is Lithium Americas (NYSE:LAC). As its name suggests, Lithium Americas is engaged in the lithium mining business. For those bullish on the future of battery technology and battery storage, lithium is a key component to consider.

Notably, battery sleeper stock Lithium Americas is among the few companies with mining rights in the U.S. The company’s Thatcher Pass mine in Nevada is the basis for the company’s massive reserves.

For those concerned about the geopolitical situation right now, this company provides a serious defensive posture. As more battery production is on-shored, Lithium Americas stands to reap the benefits. Additionally, more lenient permitting and regulation from the government, along with strong investment interest from institutional and retail investors, makes this a top stock to consider for the long-term.

With lithium, it’s also clear that demand will likely continue to increase over the long-term. Those looking for a true “picks and shovels” play on the battery space ought to consider LAC stock right now.

QuantumScape (QS)

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A more speculative pick on this list is QuantumScape (NYSE:QS). Perhaps a battery sleeper stock to some, QuantumScape is a company that’s been making a number of headlines of late in the battery technology world.

That’s because this company is focused on developing a commercial-scale solid-state battery. Most batteries use some sort of liquid electrolyte solution to pass electrons from the cathode to the anode in the battery. However, companies like QuantumScape are seeking to create a battery that doesn’t require this liquid solution. Doing so provides a denser battery, able to hold more charge and be much more efficient.

The science is still out on how long it will take to bring these theoretically-possible batteries to scale. While QuantumScape has put forward a plan to commercialize its batteries by 2025, some short sellers aren’t buying it. Accordingly, this stock has been hit with a number of short attacks, which have depressed the companies value substantially.

I have to admit, I’m skeptical as to whether QuantumScape can produce the batteries it says it can. Additionally, there’s concern that other competitors will beat the company to the punch. In either case, this is certainly more of a speculative bet.

That said, for those who think this company may be a leader in the solid-state battery space, QS stock may be worth a look.

On the date of publication, Chris MacDonald 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 Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.