Friday, January 28, 2011

Top Lithium Battery Plays

Lithium is used in more than 60% of mobile phones. It is also the leading treatment for bipolar disorders due to the counteraction of both depression and mania. As a matter if fact, in areas where the water contained large amounts of lithium, there were significantly lower suicide rates. Lithium also has a lot of other uses including rocket propellants, red fireworks, and high temperature grease. has just updated its list of over 20 stocks involved in the lithium industry, from the mining companies to the producers of lithium ion batteries. The stocks range from microcaps to large corporations that pay dividends.

As an example, FMC Corp. (FMC) has a division based in Argentina called FMC Lithium, which owns the Salar de Hombre Muerto mine, containing 850,000 tons of reserves at up to 70 meters of depth. FMC trades at 13.5 times forward earnings, and pays a small yield of 0.7%.

Sociedad Quimica y Minera (SQM), also known as Chemical & Mining Co. of Chile Inc., is the largest lithium producer in the world. This New York Stock Exchange traded company, which has a market cap of almost $13.9 billion, has a forward price to earnings ratio of 27 and a yield of 1.0%.

Advanced Battery Technologies, Inc. (ABAT) is one of the few battery manufacturers generating a profit. The company, which makes rechargeable polymer lithium-ion batteries, has a PE of 6.5.

Another alternative is to invest in the new Exchange Traded Fund called Global X Lithium ETF (LIT), which is designed to track the Solactive Global Lithium Index. This ETF is up 23.5% for the last three months.

To see a list of over 20 lithium companies which can be downloaded, sorted, and updated, go to

Disclosure: Author did not own any of the above at the time the article was written.


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