With so much attention paid to the novel coronavirus and the pandemicâ€™s economic and geopolitical implications, multiple industries have fallen by the wayside in terms of visibility. But at some point, our modernized societies must turn back to the innovations and technologies that have driven them in the pre-pandemic era. Therefore, the case for battery stocks to buy is a compelling one.
First, although the global spread of Covid-19 had shuttered viable economies, our dependency on tech hasnâ€™t diminished. In fact, you can make the argument that it has only accelerated. As a prime example, millions of white-collar workers in the U.S. suddenly found themselves operating from home. This may lead to overall higher demand for lithium battery stocks to buy as people ramp up usage of laptops, smartphones and other digital devices.
Second, demand for batteries doesnâ€™t necessarily have to involve â€śseriousâ€ť endeavors. With the lockdowns, billions across the globe had to find ways to fill the time. For developed and top-tier developing nations, many found solace in video games. And what powers modern wireless game controllers? In many cases, itâ€™s lithium.
Another big development is the role of electric vehicles. To be fully transparent, I havenâ€™t been the biggest fan of EVs. At the same time, consumer demand has steadily increased. Granted, the economics of EVs may take a hit, given that combustion-based vehicles will probably be sold at steep discounts due to the pandemic.
But in the long run, this is a space to consider, if have the stomach for potential volatility. Below are eight battery stocks to buy if you do:
Typically, mining companies are not known for their stability. Admittedly, with the present economic crisis, the situation on paper doesnâ€™t look good for Sociedad Quimica y Minera de Chile. Nevertheless, since hitting a bottom in the second half of March of this year, SQM stock has been steadily moving higher.
Although a risky bet, it still intrigues. First, shares are at a discount relative to this yearâ€™s highs. Also, thereâ€™s something to be said about the nature of the global economic downturn. As international benchmark indices suggest, were it not for the coronavirus, the investment markets could have moved higher all this time.
Fundamentally, SQM stock is incredibly relevant. As the leading producer of lithium, long-term demand should only increase. And as I mentioned above, the new normal has made lithium more in demand due to the devices it powers.
Like other battery stocks, Albemarleâ€™s relevant lithium mining and processing business didnâ€™t save its market value from the coronavirusâ€™ claws. After moving dramatically higher into the back half of February, ALB stock quickly tumbled. It also didnâ€™t help that the underlying company produced a mixed earnings report, beating per-share profitability targets but missing badly on consensus estimates for revenue.
Still, when it comes to battery stocks to buy, I believe Albemarle has the right stuff for patient investors. As with SQM, ALB stock was on a hot streak this year before Covid-19 struck. This suggests that without the virus, the narrative was very positive for lithium miners.
Additionally, if prospective buyers are willing to stick out the nearer-term turbulence, Albemarle could offer big returns due to EVs. While the automotive market right now is questionable due to consumers stockpiling cash, EVs represent geopolitical insulation from the whims of oil.
Discussions about battery stocks to buy invariably focus on lithium-ion. Given its power, lifespan and recharging capacity, lithium is far superior â€” at least for modern applications â€” than yesteryear alkaline batteries. Still, lithium-ion batteries arenâ€™t without disadvantages, namely cost. And this brings us to Energizer and the underappreciated narrative for ENR stock.
Despite the popularity of lithium batteries, their higher cost doesnâ€™t make them appropriate for every application. Even today, many remote controls use standard alkaline batteries. Moreover, itâ€™s always good to have a set of Energizer batteries to power basic tools, such as flashlights and radios. Again, these are yesteryear technologies, but they often work best in emergencies.
By now, all Americans should recognize the importance of preparation. While you could use your smartphoneâ€™s light in a pinch, at some point, youâ€™re going to need to recharge it. But if the power is gone, you need access to independent (and preferably cheap) energy sources; hence, the case for ENR stock.
If you thought the coronavirus was bad, keep in mind that hurricane season is here. So, we may be seeing increased demand for Energizer shortly.
Although Best Buy is a big-box retailer and doesnâ€™t necessarily figure among battery stocks, itâ€™s also a beneficiary of the lithium-driven revolution. From smartphones to laptops to video game consoles and everything in between, Best Buy probably carries it. Plus, I canâ€™t help but notice that BBY stock has performed very well since March, especially considering that itâ€™s a discretionary retailer.
A couple of other factors come to mind. First, the company has adjusted very well to the quarantines, organically marketing its shipping delivery and store pickup options. With the latter, it has emphasized its curbside pickup option, which may continue to be popular as the specter of the coronavirus still lingers in many communities.
Second, with so much prominence placed on stay-at-home functions and remote work, older demographics that may not be so tech savvy can advantage Best Buyâ€™s comprehensive customer service platform. This is one of the underappreciated factors supporting BBY stock.
Specializing in solar panels, Enphase Energy is one of the more compelling battery stocks to buy. Thatâ€™s because the solar platform necessitates the need for energy storage and this technology requires lithium among other key metals. However, the current economic crisis represents the first major downturn for many solar companies which are typically young. So, what makes ENPH stock rise above the muck?
Likely, it has to do with Enphaseâ€™s microinverter technology. Unlike other solar systems, Enphase microinverters are substantially more productive and reliable. Because each inverter operates independently, a shaded or dirty panel wonâ€™t impact the others. Furthermore, should that one panel be knocked out of commission, it wonâ€™t take down the entire system.
Additionally, Enphase utilizes an all-AC system, which translates to no high-voltage DC power atop your abode. According to the companyâ€™s website, schools commonly choose its system because it meets the most stringent government standard.
Still, I wouldnâ€™t necessarily discount the economic risk toward ENPH stock. But as one of the best in the business, Enphase is worth a gamble.
For most people, Panasonic is a brand thatâ€™s most associated with consumer electronic products, such as digital cameras and headphones. Additionally, youâ€™ll find the corporate name listed in the kitchen, through products ranging from microwaves to rice cookers. However, Panasonic is a surprisingly relevant pick among battery stocks.
First, Panasonic is one of the leading producers of lithium-ion batteries. These power sources arenâ€™t just for digital computing devices but rather, they find incredible popularity among industries you wouldnâ€™t necessarily think about, such as vaping. With increased stress from the quarantines leading to â€śviceâ€ť activities, donâ€™t be surprised to see a bump up in PCRFY stock.
Second, Panasonicâ€™s battery business covers a wide range of industries and applications. Most significantly, itâ€™s a big player in the EV market. However, the company also provides expertise in smart infrastructures and the broader internet of things. Therefore, donâ€™t ignore PCRFY stock when going battery hunting.
An electronic capacitor manufacturing company, very few people in America have likely heard about Murata Manufacturing. Frankly, Iâ€™m not even sure if too many people in Murataâ€™s native Japan have heard of the organization, given its sleep-inducing business. However, everybody knows Sony (NYSE:SNE) â€” at least I hope they do. And this is where MRAAF becomes an important player among battery stocks.
A few years ago, Sony sold its battery business to Murata, to the delight of the acquiring companyâ€™s management team. Prior to the buyout becoming official, Murata forwarded ambitious plans to invest $453 million to bolster overseas production in a bid to increase market share. Thus, itâ€™s not terribly surprising that MRAAF stock has bounced sharply from its coronavirus-fueled lows.
While Sony-branded batteries have always been popular for consumer electronics use, Murata wants to go deeper, specifically diving into the automotive industry. Additionally, the company offers energy storage solutions for residential and commercial applications. Though it may not be a household name, MRAAF stock is a pivotal one for the battery industry.
Trading hands for only a few pennies, American Battery Metals is easily the most speculative in this list of battery stocks. However, if youâ€™ve got some â€śdumb moneyâ€ť lying around, ABML stock may be a smart pick down the line. As a Nevada-based lithium miner, it offers a relevant underlying business in a geographically stable area.
However, one of the main criticisms of lithium mining is that itâ€™s not exactly the most environmentally friendly endeavor. First, the mining process can contaminate water sources, devastating nearby communities. Also, chemical leakage is a huge concern, which can damage the soil and later cause air pollution. But according to American Batteryâ€™s website, it is heavily focused on efficient but environmentally responsible mining.
Whether the company can live up to this promise or not remains to be seen. Obviously, Wall Street is skeptical; otherwise, youâ€™d expect ABML stock to be trading at a higher threshold. Still, if American Battery can deliver the goods, this could turn out to be a unicorn ten-bagger.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he is long SNE stock.