In this article, we look at the 12 best battery stocks to invest in before they take off. If you would like to skip articles on the latest developments in the battery and electric vehicle industry, please visit the following link: 5 battery-related stocks to invest in before taking off.
The global battery industry, “powered” by lithium, will be much more important in 2024 than it was in 2014. That's because Tesla Inc. (NASDAQ:TSLA)'s successful mass production of electric vehicles has proven to investors that: Investing in clean energy stocks can have lucrative outcomes, and electric vehicles have the best chance of becoming reality rather than just science fiction.
But just like smartphones and laptops, batteries are one of the weakest parts of modern electric cars. Smartphones, even those from multitrillion-dollar consumer technology giant Apple Inc. (NASDAQ:AAPL), are known for their batteries, which degrade over time even though other components such as displays and processors can perform well for years. deteriorates with. Similarly, batteries in electric cars made by Tesla and other electric car stocks such as Lee Auto (NASDAQ:LI) are not only one of the most vulnerable components of a car, but if the battery There may be a shortage of supply. Changes in the global lithium industry.
Unsurprisingly, this means that the global battery industry is not only one of the most valuable industries in the world, but one that will continue to grow steadily in the coming years if the global plan to phase out internal combustion engine vehicles comes to fruition. This means that growth is expected. According to estimates, the global lithium battery industry will be worth $54 billion in 2023, but the global macroeconomic challenges left after the coronavirus pandemic are also shaking up the sector considerably. Previously, battery stock investors had to closely monitor China to see if their industry's supply chains were functioning smoothly, but as of February 2024, according to Bloomberg data, Canada is one of the world's leading battery supply chains. This is the first time in history that China has been dethroned from the top spot, and comes as the world moves towards sustainable and ethical battery sourcing.
What does this mean for battery stocks? This is good news, especially for battery stocks traded on US exchanges. That's because not only will U.S. automakers be able to rely on Canada for their battery needs, but they will also be able to rely on tax credit incentives under the Biden-Harris administration's Inflation Control Act (IRA). It may also apply to batteries and materials sourced from Canada.
But while Canada's rise in the global lithium battery supply chain is providing a tailwind for battery stocks, they enter 2024 on shaky footing. Electric vehicles, their main high-growth market, are struggling to operate in an era of high interest rates and inflation, and in the fourth quarter of 2024, electric car king Tesla will be replaced by Chinese conglomerate BYD (OTC: BYDDF). . Tesla delivered 484,507 cars in the fourth quarter of 2023, while BYD recorded sales of 526,409 cheap electric cars. Their efforts are a perfect example of the cutthroat Chinese market, where Tesla and BYD have lowered prices and sacrificed margins to gain market share, even if their products earn less profit per dollar. .
This disruption in the electric vehicle industry is also impacting the global lithium market. Lithium and battery stocks such as Lithium Americas Corporation (NYSE:LAC) and Albemarle Corporation (NYSE:ALB) have seen lithium prices decline by more than 70% and 31% each due to the simultaneous effects of the economic downturn. It has fallen by 19.29%. Increase in demand and supply. The drop in lithium and battery stocks also comes as U.S. oil giant Exxon Mobil Corporation (NYSE: This happened at a time when I was interested in the company and it had the potential to become a battery stock. By the end of the decade.
So, as the global battery industry begins to evolve and respond to changing macroeconomic conditions in 2024, we decided to see which battery stocks are favored by hedge funds. Stocks to watch include EnerSys (NYSE:ENS), SolarEdge Technologies, Inc. (NASDAQ:SEDG), and Tesla, Inc. (NASDAQ:TSLA).
Close-up of a lithium-ion battery surrounded by a network of silicon nanowires.
our methodology
To create a list of the best battery stocks to buy, we ranked the U.S.-listed battery stocks held by the Global X Lithium & Battery Technology ETF and Amplify Lithium & Battery Technology ETF by year-to-date price performance. did. We then ranked the stocks that had fallen year-to-date by the number of hedge funds that bought the stock in the fourth quarter of 2023, and selected the top stocks as the best battery stocks.
We also mentioned hedge fund sentiment for these best battery stocks. The top 10 consensus stocks selected by hedge funds have outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail). That's why we pay close attention to this often ignored metric.
12 battery-related stocks to invest in before takeoff
12. Sociedad Quimica y Minera de Chile SA (NYSE:SQM)
Number of hedge fund investors in Q4 2023: 17
Year-to-date stock price decline: 26.58%
Sociedad Química y Minera de Chile SA (NYSE:SQM) is a Chilean chemical company that supplies cathodes and other battery products to battery manufacturers and other companies. The company has struggled financially as the global lithium industry slows, missing analyst EPS estimates in three of the last four quarters.
17 of the 933 hedge funds surveyed by Insider Monkey purchased shares of Sociedad Quimica y Minera de Chile SA (NYSE:SQM) in Q4 2023. was. Ken Griffin's Citadel Investment Group became the company's largest investor with a $30.4 million stake.
SolarEdge Technologies, Inc. (NASDAQ:SEDG), Sociedad Química y Minera de Chile SA (NYSE:SQM), EnerSys (NYSE:ENS), and Tesla, Inc. (NASDAQ:TSLA) are battery stocks that hedge funds are watching This is the top. It's piling up.
11. Sigma Lithium Corporation (NASDAQ:SGML)
Number of hedge fund investors in Q4 2023: 18
Year-to-date stock price decline: 57.84%
Sigma Lithium Corporation (NASDAQ:SGML) is a Brazilian lithium mining company headquartered in São Paulo, Brazil. 2024 is shaping up to be a big year for Sigma Lithium Corporation (NASDAQ:SGML) and Buffett-backed BYD, with media reporting that they are in talks to deepen their relationship.
Insider Monkey's December 2023 quarterly survey of 933 hedge funds revealed that 18 held shares in the company. Sigma Lithium Corporation (NASDAQ:SGML)'s largest hedge fund investor is Jos Shaver's Electron Capital Partners, with $69.7 million worth of stock.
10. Plug Power Co., Ltd. (NASDAQ:PLUG)
Number of hedge fund investors in Q4 2023: 19
Year-to-date stock price decline: 25.38%
Plug Power Inc. (NASDAQ:PLUG) is an electric vehicle battery technology company developing hydrogen-based fuel cell systems. Investors in the company were looking forward to good news in February 2024 after RothMKM upgraded the stock to Buy from Hold and raised its price target from $4.5 to $9.
Insider Monkey examined 933 hedge funds' portfolios for the December quarter of last year and found 19 Plug Power Inc. (NASDAQ:PLUG) shareholders. Vince Maddy and Sean Brennan's SIR Capital Management had the largest stake, valued at $7.7 million.
9. QuantumScape Corporation (NYSE:QS)
Number of hedge fund investors in Q4 2023: 20
Year-to-date stock price decline: 5.22%
QuantumScape Corporation (NYSE:QS) is a pure-play battery stock that develops solid-state lithium batteries for electric vehicles. The company's fourth-quarter results showed a loss of 23 cents per share for the segment, beating analysts' expectations for a loss of 34 cents per share, but the stock still fell after the results did not create an optimistic outlook. .
By the end of the fourth quarter of 2023, there will be 20 of them. 933 hedge funds tracked by Insider Monkey were shareholders in the company. The largest hedge fund investor in QuantumScape Corporation (NYSE:QS) is Philip Laffont's Cortue Management, with his $23.2 million investment.
8. NIO Inc. (NYSE:NIO)
Number of hedge fund investors in Q4 2023: 20
Year-to-date stock price decline: 30%
NIO Inc. (NYSE:NIO) is a Chinese electric vehicle company. We tried to avoid automakers in this list of the best battery stocks, but it's worth mentioning because NIO Inc. (NYSE: NIO) is set to start manufacturing its own 150 kWh batteries soon later this year. there is.
Insider Monkey's December 2023 quarterly survey of 933 hedge funds revealed that 20 hedge funds had investments in NIO Inc. (NYSE:NIO). The largest shareholder was Jos Shaver's Electron Capital Partners, with shares worth $40.1 million.
7. BHP Group Limited (NYSE:BHP)
Number of hedge fund investors in Q4 2023: 24
Year-to-date stock price decline: 14.3%
BHP Group Limited (NYSE:BHP) is one of the world's largest mining companies, so it's critical to the stability of the battery industry. When it comes to batteries, the company is responsible for mining and selling important metals such as copper and nickel. The company's stock has an average rating of “Buy” and an average analyst price target of $66.45.
In the final quarter of last year, 24 of the 933 hedge funds covered by Insider Monkey held shares in the company. The largest hedge fund investor in BHP Group Limited (NYSE:BHP) is Ken Fisher's Fisher Asset Management with 19.9 million shares worth $1.3 billion.
6. Enobix Corporation (NASDAQ:ENVX)
Number of hedge fund investors in Q4 2023: 25
Year-to-date stock price decline: 6.52%
Enovix Corporation (NASDAQ:ENVX) is a manufacturer of pure-play remanufactured batteries headquartered in Fremont, California. Enovix Corporation (NASDAQ:ENVX)'s fourth-quarter results didn't help its stock price, as the company reported a loss of 36 cents per share on revenue of $7.3 million, with the stock down 2%. Sales exceeded analysts' expectations, but loss per share was lower than expected.
25 of the 933 hedge funds in Insider Monkey's Q4 2023 database invested in Enovix Corporation (NASDAQ:ENVX). Jos Shaver's Electron Capital Partners held the largest stake, valued at $40.5 million.
Enovix Corporation (NASDAQ:ENVX) joins EnerSys (NYSE:ENS), SolarEdge Technologies, Inc. (NASDAQ:SEDG), and Tesla, Inc. (NASDAQ:TSLA) on our list of best battery stocks .
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Disclosure: None. 12 battery-related stocks to invest in before takeoff Originally published on Insider Monkey.
