7 battery stocks to weather the September market slump

With EV stocks and other renewable energy sources in the spotlight, finding the best battery stock picks can be difficult.

September is historically the worst month for the markets. Since 1928, the S&P 500 has fallen an average monthly average of 0.42%. For nearly a century, it has produced positive returns just 44.7% of the time.

That’s not all bad news, however. In the years that the S&P was down through August, it’s down an average of 3.4% in September.

However, this September has so far proved to be an anomaly. By September 8, it was up 2.01%. That’s a very encouraging sign given previous precedents that indicated it’s more likely to stall.

These are battery stock picks designed to help investors beat a month of traditionally falling markets.

ALB Albemarle $296.97
FREY FREYR battery $13.42
QM Sociedad Quimica y Minera de Chile $108.75
LAK lithium America $31.64
QA QuantumScape $11.52
GNENF ganfeng lithium $8.60
PCRFY panasonic $8.08

Albemarle (ALB)

Source: Igor Golovniov/Shutterstock.com

Albemarle (NYSE:ALB) is easily one of the best stock picks for batteries. Based in Charlotte, North Carolina, the company is a leading lithium producer and a well-known, stable choice for investors.

Albemarle has established a leading position in the new automotive economy, which will be heavily influenced by electric vehicles. In other words, it’s a pickaxe and shovel game for the continued growth of electric vehicles.

ALB stock has had a particularly strong 2022. It’s up 23% as of this writing, while the S&P 500 has remained down 16.5% over the same period.

September has seen a similar story for Albemarle, which is up nearly 11%, climbing from $260 to $290.

In late August, the company announced a corporate reorganization to better capitalize on lithium demand. The market reacted positively to the news that followed a strong earnings report.

Freyr Battery (FREY)

A vector illustration of a battery with neon lines swirling it;  battery forever

Source: MarySan/Shutterstock

FREYR battery (NYSE:FREY) should find a welcome audience among green investors. The company develops high-density, low-cost lithium-ion batteries.

The company’s operations are powered by hydro and wind energy, giving it a certain edge for the truly green investor. Add to that its roots in Norway and its headquarters in Luxembourg, and its eco-friendly credentials make it one of the best picks for battery stocks over the long run.

These credentials are reflected in a price target that is 55% above the current price of $12.50. FREYR Battery also has a unanimous “buy” rating.

The good news is that FREY stock is supported by strong results over the last quarter. The company reported net income of $4.7 million compared to a net loss of $8.036 million a year earlier.

Sociedad Quimica and Minera de Chile (SQM)

Sociedad Quimica y Minera logo displayed on a mobile phone with the company's website on it.  SQM share

Source: madamF / Shutterstock.com

As you might have guessed from the name, Sociedad Quimica y Minera de Chile (NYSE:QM) is a mining stock, but that doesn’t mean it isn’t one of the best battery stocks. The company has more diversified operations than Albemarle, as both companies are considering battery stocks due to lithium mining.

And like the ALB share, the SQM share also performed strongly in 2022. In fact, it has more than doubled, going from $50 to over $110.

This sharp price increase is a product of the rapidly increasing sales of lithium and derivatives. Sociedad Quimica y Minera de Chile grew those earnings by a massive 1,033% in Q2 YoY and 1,004% in H1 of this year.

The company is a prime example of what can happen when rapidly increasing demand meets increasing production.

Lithium Americas (LAC)

a lithium mine

Source: Shutterstock

lithium America (NYSE:LAK) stock has not proved to be as profitable in 2022 as the other lithium mining stocks on this list.

However, it remains slightly higher this year, which is an achievement in and of itself. Despite the fact that other lithium stocks have outperformed, LAC stock has strong upside potential, arguably more than the other top battery stocks we’ve covered.

The Vancouver-based company is developing three lithium mining projects. Two of these are in Argentina and the others are in Nevada.

The company does not yet produce lithium. However, shares are currently trading for $31 and LAC stock has a price target of $35. That strongly suggests that investors have a firm belief that the company will mine significant amounts of lithium.

The company continues to explore a separation of its operations in the US and Argentina. If done, it could make its US-based operations particularly attractive given that Thacker Pass, where the operations are located, is the largest known lithium resource in the US

QuantumScape (QA)

A sign for QuantumScape (QS).

Source: Michael Vi / Shutterstock.com

I have to admit I like the narrative behind it QuantumScape (NYSE:QA). The company was widely slandered after its IPO in late 2020. In early 2021, a short seller report from Scorpion Capital sent the company’s shares plummeting.

Not good.

At this point, many investors compared the young upstart in solid-state battery manufacturing to a house of cards. It seemed the company was headed for disaster. Fast forward seven months and QuantumScape has proved critics wrong.

By November, the company had released 10-layer battery cell test data showing 800 cycles with charge rates in excess of 1 hour at 25 degrees Celsius. This meant that QuantumScape achieved the primary goal it set itself faster than expected, just months after serious allegations were leveled against the company.

Ganfeng Lithium (GNENF)

a row of AA batteries to represent battery supplies

Source: Shutterstock

simply put, ganfeng lithium (OTCMKTS:GNENF) stock has massive upside potential.

Shares of the Chinese lithium producer are trading at $8.30 at the time of writing. However, the target price is $87.32. The company tries to offer everything to everyone within the lithium supply chain.

Ganfeng Lithium’s activities cover the entire spectrum from raw material production to chemical refining, battery manufacture and storage to recycling.

The company’s latest earnings report shows impressive numbers. Those numbers include operating income that increased 234%, resulting in a 956% increase in net income.

These gains were unaudited, which may explain why GNENF stock remains undervalued.

Panasonic (PCRFY)

A Panasonic (PCRFY) sign hangs in Beijing, China.  generation z

Source: Testing/Shutterstock.com

The reason to invest in panasonic (OTCMKTS:PCRFY) What is in stock is that the company is a massive supplier of EV batteries.

Panasonic has shipped more than 6 billion electric vehicle battery cells from its Nevada facility Teslas (NASDAQ:TSLA) gigafactory in the state.

And in July, the company announced plans to build a $4 billion battery manufacturing facility in Kansas. Therefore, Panasonic should logically remain an integral part of the further development of the USEV sector.

PCRFY stock has plummeted from over $11 in early 2022 to below $8 currently. Analysts believe it should trade above $10. As EPS estimates continue to stabilize, this seems increasingly possible.

At the time of publication, Alex Sirois had no position (either directly or indirectly) in any of the securities mentioned in this article. The opinions expressed in this article are those of the author and are governed by InvestorPlace.com Posting Policies.

Alex Sirois is a freelance contributor at InvestorPlace whose personal stock investing style is focused on long-term, wealth-building, buy-and-hold stocks. Having worked in multiple industries from e-commerce to translation to education, and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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