This note originally appeared on AusBiz.
With lithium prices having a significant tumble this year, Shaun Cartwright of Anadara Asset Management shares his optimistic view about lithium stocks. Even amidst this commodity downtrend, he strongly asserts on the importance of staying in the lithium space and keenly studying the pertinent stocks.
Various reports from large banks like UBS suggest a potential decrease in the share prices of some larger lithium producers, but Shaun interprets that this dip will only be a short-term scenario while a looming supply issue may stir up a long-term effect.
Shaun highlights his bullish stance for Western Australian lithium developers, expressing positivity due to the political uncertainty from overseas. Noteworthy moves like China restricting their exports of graphite sparks an assumption about potential lithium export restrictions and other nations like Chile and Argentina leaning towards more heavy-handed mining tax policies, all work towards favouring Australia as a tier one mining jurisdiction. Additionally, Shaun alludes to speculative speculation keeps an eye on promising micro-cap lithium producers in Australia who could potentially reap huge profit margins in future.
When it comes to investing, Shaun leans towards safety, therefore his preference for Australian lithium stocks. Identifying lithium developers that would evolve into producers is a crucial part for investors, especially if the prices are depressively low at the moment. He also discusses some of the smaller lithium players like Wildcat Resources (WC8) and De Grey (DEG) while suggesting potential opportunities in Tech Gen (TG1) and Azure Minerals (AZS).
