Howard Klein: Return of The Lithium Bull

Published on
December 3rd, 2020
Duration
38 minutes


Howard Klein: Return of The Lithium Bull

Investment Ideas ·
Featuring Howard Klein

Published on: December 3rd, 2020 • Duration: 38 minutes

Howard Klein, founder and partner at RK Equity, joins Real Vision managing editor Ed Harrison to provide a strategic update on the battery market and specific lithium stocks such as Albemarle ($ALB), Livent ($LTHM), and Piedmont Lithium ($PLL). Key learnings: Lithium miners offer exposure to the electric vehicle sector but at tremendous discounts to EV manufacturers such as Tesla. Klein is bullish on mined commodities in general, but the inherent inelasticity of lithium makes it especially attractive. Over 80% of the world’s lithium hydroxide supply comes from China, and COVID-19 has brought the issue of supply chain resilience to the fore. Additionally, Klein discusses how lithium hydroxide is a faster-growing market than that for Lithium carbonate. Filmed on November 30, 2020.

Comments

Transcript

  • LS
    Lemony S.
    14 January 2021 @ 21:31
    Lithium news finally popped a bit!
  • JJ
    Joao J.
    24 December 2020 @ 13:54
    @Howard Would love to hear your opinion on the developments of the green field projects in Portugal. In your opinion, are they viable? Thanks
  • AC
    Alvaro C.
    4 December 2020 @ 20:20
    @Howard: What is your take on Chile's SQM (not a pure-play, but heavily exposed to lithium nonetheles)? Thanks
    • HK
      Howard K. | Contributor
      20 December 2020 @ 18:00
      SQM is only making 12% of its gross margin from lithium these days, down from 50% a few years ago, largely as a result of their predatory pricing strategy into the low quality China market which is much more commoditized. SQM is not currently a meaningful player with western auto/battery OEMs in the premium priced specialty hydroxide segment of the market. That and ESG concerns lead me to largely avoid this stock
  • TW
    Tork W.
    18 December 2020 @ 14:12
    Good Information. As EV adoption accelerates, the opportunities will also.
  • PJ
    Paul J.
    6 December 2020 @ 20:38
    who's the annoying ginger at the end?
    • PU
      Peter U.
      8 December 2020 @ 17:16
      lol
  • RP
    Ron P.
    5 December 2020 @ 12:56
    I like this guy. Sounds honest and credible. Please ask him if he gets paid by Piedmont. I have seen him in Piedmont gear
    • CW
      Claude W.
      5 December 2020 @ 22:57
      Important point to get a disclosure on any potential conflicts of interest
  • BA
    Bob A.
    5 December 2020 @ 03:51
    Great guest and would have enjoyed a long format with him. Thanks.
  • LS
    Lemony S.
    3 December 2020 @ 16:51
    I've been in a miner speculation for some time ... all it showed me was that they all move according to the global lithium (price) demand ... when is that going back to how it was in 2017? If so, I'll enjoy the ride.
    • HK
      Howard K. | Contributor
      4 December 2020 @ 15:14
      RK Equity anticipates lithium hydroxide prices should begin to rise by 2H 2021. Lithium carbonate prices a bit later than that. Unclear if they will reach 2017 prices, but possible as there has been under-investment. But what we might see is auto OEMs like Tesla signing long-term deals for fixed prices which may cap the upside for some producers, but will give them higher quality earnings for which a higher EV/EBITDA multiple should be paid for a company like Albemarle. For a developer like Piedmont, more supply agreements like that which it signed with Tesla should be further catalyst to stock in 2021
  • TS
    Thomas S.
    3 December 2020 @ 22:29
    Unfortunately I got in a few years back just before prices peaked and new supply, or perceived new supply, went through the roof. Needless to say, share prices collapsed .. and only recently recovered, but not to profit levels for me. I'm concerned about global slowdown in 2021-22. Won't this provide headwinds for these names ?
  • HR
    Humberto R.
    3 December 2020 @ 15:57
    ABML is not only a lithium miner but also a battery metals recycling closed loop play in Nevada. Early days in this space.
  • PC
    Petros C.
    3 December 2020 @ 12:53
    It looks like Albemarle corp ticker is ALB https://www.marketwatch.com/investing/stock/alb
  • CB
    Clifford B.
    3 December 2020 @ 07:34
    Good interview. Picks and shovels.... or in this case, wood for the handle and ore for the pick.