Please ensure Javascript is enabled for purposes of website accessibility

Why Lithium Americas Stock Popped 9% Thursday

By Rich Smith – Oct 29, 2020 at 1:18PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The pandemic and the election could be good news for this lithium miner.

What happened

Lithium Americas (LAC -2.56%) stock is up 9.1% as of 12:10 p.m. EDT Thursday, and no one seems to know why.

No analysts have upgraded this lithium miner today. Lithium Americas hasn't reported earnings. There really appears to be no news catalyzing the stock's move higher... until you draw back a bit and look at the bigger picture.

Arrow angles up on a green stock chart

Image source: Getty Images.

So what

In a column this morning, The Wall Street Journal observed that despite -- or because of -- the pandemic and the millions of Americans it has stranded working from home, and using more electricity than usual, solar stocks are thriving in the era of COVID-19. A weak economy and massive stimulus spending by the government have driven interest rates lower, making solar panels more affordable. At the same time, consumers are seeing rising electric bills because they're on their computers all day at home -- and keeping the lights on and the A/C or heat running, too -- and are more interested than ever in cutting their electric bills.

All of this is good news for solar panel sales, and now, observes the Journal, solar companies are seeing "an opportunity to sell battery storage as an add-on to rooftop solar."  

Now what

This brings us to Lithium Americas -- which doesn't make solar panels, but does have a plan to begin mining lithium with which to make batteries that can store the electricity generated from those panels.

If demand for solar batteries increases, as WSJ seems to think it will, that should be good news for Lithium Americas stock, the more so because, as Reuters reported last week, a Joe Biden presidency would favor purchases of lithium mined in America over lithium mined abroad in his proposed EV infrastructure and other green projects. 

In short, prospects are starting to look brighter for this would-be lithium miner. Now all Lithium Americas needs to do is start mining some lithium.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.