Perth based PLS has become a major $8.7bn lithium stock but as we discussed earlier its shares trade with the volatility closer to that of a penny dreadful! The stock’s already corrected 25% in 2022 and while we believe the downside momentum / sentiment has further to unfold we like the stock another 5-7% lower. One factor we particularly like with PLS and the whole sector is their relatively low correlation to the ASX i.e. they often move independently of the market. The company has the world’s largest independent hard-rock lithium operation and while demand continues to grow PLS looks set to be the go to stock for many fund managers.
Australia is currently the largest producer of Lithium and is No 2 in terms of reserves, i.e. it is clearly a big growth opportunity for us but the trade was far too crowded into 2022 as analysts almost on mass forecast a stellar year for stocks in the space – there’s nothing like a good washout to produce some value.
MM likes PLS around the $2.75 region
Add To Hit List
