Shares of Lithium Americas (LAC 1.73%), a junior lithium mining company, skyrocketed 296% in 2020, according to data from S&P Global Market Intelligence.
For context, the S&P 500 returned 18.4% and shares of the world's largest lithium producer, U.S.-based Albemarle, gained 102% last year.
There were a handful of notable catalysts that drove Lithium Americas stock's electrifying performance in 2020. But the main ones were probably two (somewhat related) industry-level catalysts, which have increased investor optimism about the company's specific prospects as it moves closer to the commercialization stage.
The Canada-based company is a development-stage company that has two projects: Thacker Pass, a clay project in Nevada, with the start of production targeted for the third quarter of 2022; and Cauchari-Olaroz, a brine project in Argentina.
The first industry-level catalyst was the increase in investor enthusiasm throughout much of the year about the outlook for electric vehicles (EV), which led to investors pouring money into EVs and related groups of stocks. Lithium stocks were among these since lithium is used to produce the lithium-ion batteries that power EVs. (You can read my more detailed explanation here.)
The second catalyst didn't occur on one specific date. It came near the end of the year as the U.S. presidential election was approaching and (now President-elect) Joe Biden was maintaining his solid lead over President Trump. Investors, as a group, believe that a Biden administration will be more favorable for the EV industry and other groups in the broader climate change space.
As I previously wrote, "Lithium Americas stock remains speculative since the company isn't yet mining any lithium for commercial sale. So, only investors who are quite risk-tolerant should consider buying it."