Yesterday saw IGO endure a sharp -6.7% pullback as lithium related names came under the hammer. However, IGO is a low-cost currently profitable producer which will benefit from further strength in lithium prices with a far higher degree of certainty than some of its peers. However, having not snapped back as strongly as PLS and MIN we believe its pullback will likely be shallower, assuming it continues. While the ideal entry into IGO for us is under $4.80, we wouldn’t be surprised to see the bargain hunters enter sooner, limiting the extension on the downside. The relatively small ~7% short position shows the less speculative nature of IGO.
- We like the risk/reward for this low-cost lithium producer back around $4.75, or 5% lower.
MM is cautiously bullish towards IGO ~$4.75
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