ASX Lithium Stocks Recommended by Brokers: WHY?

[Garpal Gumnut]

Latest lithium views from 3 major brokers: Price forecasts & ASX lithium stock picks

Three major brokers just released lithium sector updates, with most remaining cautious on the outlook for the lithium market. We bring you their lithium price forecasts as well as their key ASX lithium stock picks. Stocks covered: A11 PLS IGO MIN SYA CXO PLL LTR LTM

www.marketindex.com.au

This interesting article in Market Index today discusses recommendations from Morgan Stanley, Goldman Sachs and Macquarie to buy Australian lithium miners. Each recommends different miners. The usual suspects are included.

Beware.

These brokers recommended these stocks when the Lithium price was quite high, it has fallen 70% over 12 months. Many of their large clients are overloaded with Lithium miners. All agree it has further to fall and will remain low due to existing inventory, producers willing to sell at any low price and too many producers.

Brokers need to sell miners but there are few buyers as their large clients are very, very angry. This is an attempt to draw in investors who follow broker's recommendations to buy stocks that nobody wants.

gg

 

[divs4ever]

i hold MIN ( 'free-carried' ) and IGO ( and the completely under the radar WES )

but did not buy into any of these stocks because of their lithium exposure

( which seems to be a better motive )

very interesting that the experienced professionals seem to get carried away , by every new dream/fad

i remember well the Graphite/Graphene 'rocket-ship i let fly off because i couldn't understand why all the fuss

this time stocks i already held, jumped on that train on my behalf ( for better or worse )

 

[Sean K]

I do wonder with brokers and any conflict of info. See GYG valuations being reported recently.

And here:

Morgan Stanley proposes a “cautious” approach. The broker calculates that Pilbara Minerals (ASX: PLS) and IGO (ASX: IGO) are trading on an “implied spodumene price of US$1,350/t and US$1,370/t, respectively”. The current spodumene price is closer to US$950/t.

Then, a couple od paras later:

On ASX lithium stocks, Goldman Sachs is BUY rated on IGO only. It’s the only stock in their coverage that is presently trading at an implied spodumene price below the current spot price.

 

[eskys]

Lithium not happy today..............see list of companies below:

ASX Lithium Companies | Full List - Market Index

Full list of Lithium companies trading on the ASX. View today’s share price activity. Sort alphabetically, by performance or market cap.

www.marketindex.com.au

 

[sptrawler]

Lithium producers are hurting.

Scrap metal pile next to a back road reveals ghosts of lithium past, present and future

Albemarle has revealed it lost more than $1 billion last quarter and its failed Kemerton expansion project is largely to blame. Analysts say it could forecast an end to lithium hydroxide processing in WA.

www.abc.net.au

 

[miawilson]

This interesting article in Market Index today discusses recommendations from Morgan Stanley, Goldman Sachs and Macquarie to buy Australian lithium miners. Each recommends different miners. The usual suspects are included.

Beware.

These brokers recommended these stocks when the Lithium price was quite high, it has fallen 70% over 12 months. Many of their large clients are overloaded with Lithium miners. All agree it has further to fall and will remain low due to existing inventory, producers willing to sell at any low price and too many producers.

Brokers need to sell miners but there are few buyers as their large clients are very, very angry. This is an attempt to draw in investors who follow broker's recommendations to buy stocks that nobody wants.

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Very new to trading I have a bunch of safe ASX stock and I also put a few grand into 2 risky Lithium stocks (LKE) Lake resources & (MNS) Magnis Energy Tech and they have steadily dropped to be worth nearly nothing.

I want to hold them and I belive that in a year or two they will go great with electic cars etc but I see MNS were/are suspended while they replace board and LKE looks similar and as a newbie I wonder if I am doing the right thing, should I just sell them and eat the loss? It is a lot of money for me so I am just looking for any thoughts and advice. I am keeping an eye on the news and announcements but I dont really understand all the corp governance stuff so any help appreciated.

 

[divs4ever]

Very new to trading I have a bunch of safe ASX stock and I also put a few grand into 2 risky Lithium stocks (LKE) Lake resources & (MNS) Magnis Energy Tech and they have steadily dropped to be worth nearly nothing.

I want to hold them and I belive that in a year or two they will go great with electic cars etc but I see MNS were/are suspended while they replace board and LKE looks similar and as a newbie I wonder if I am doing the right thing, should I just sell them and eat the loss? It is a lot of money for me so I am just looking for any thoughts and advice. I am keeping an eye on the news and announcements but I dont really understand all the corp governance stuff so any help appreciated.

my exposure to lithium is via WES and IGO ( bought before either acquired lithium assets )

i have never been sold on lithium as the 'new wonder mineral ' i believe better alternatives will be developed in time

i haven't watched MNS for a while ( since before i joined here ) but the Queensland battery plant always looked like a pipe-dream and the New York only had limited capacity ( but good for proof-of-concept )

you MIGHT find EVs will wane in popularity and hybrids and others will retain a fair market share

one lesson you might have learned now is NOT to go big on small cap stocks like MNS and LKE ( or the dozens of others ) when these stocks win the go BIG ( but only a few will go 10 or 20 times the share price ) $1000 goes a long way when a small cap. lifts off ( and gives you some nice choices )

sell or hold ( or even add if you really have faith in them ) ?

so can you park the rescued cash anywhere better ?

SOMETIMES switching horses can work out , but that has it's dangers as well

wait and see what the new MNS board looks like ( check out the new board carefully )

have they been in companies that have been taken-over ( this hints they are 'putting lipstick on a pig ' hoping to sell the company or some of the assets )

are some of them banker/finance types that MIGHT mean they are trying to sell the company OR raise more cash

are they international business types that suggests they will try to market overseas ( can be expensive because of travel costs )

be careful of 'rockstar' directors ( people ridiculously over-qualified ) unless they buy 20% of the company when they move in

 

[Garpal Gumnut]

Very new to trading I have a bunch of safe ASX stock and I also put a few grand into 2 risky Lithium stocks (LKE) Lake resources & (MNS) Magnis Energy Tech and they have steadily dropped to be worth nearly nothing.

I want to hold them and I belive that in a year or two they will go great with electic cars etc but I see MNS were/are suspended while they replace board and LKE looks similar and as a newbie I wonder if I am doing the right thing, should I just sell them and eat the loss? It is a lot of money for me so I am just looking for any thoughts and advice. I am keeping an eye on the news and announcements but I dont really understand all the corp governance stuff so any help appreciated.

There is a price to pay for education on the market @miawilson , and you are paying it now. Most here on ASF would have had a similar experience. The good news for you is that your loss is a small part of your stash and there will be other opportunities.

Whether you sell or not is up to you. If you feel the stocks are viable and will reverse in to profit it may be worthwhile holding on. If not get rid of them.

Read my initial post in this thread on brokers and advisers. Ignore their recommendations and forecast prices. They often have a big investor ready to sell to you on a buy recommendation. Read read read. Educate yourself.

Keep asking questions and provide your wisdom on this forum. All the best for the future.

gg