Please ensure Javascript is enabled for purposes of website accessibility

Why Lithium Americas Stock Fell 12% in April

By Beth McKenna - May 3, 2021 at 9:13PM

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

Despite its recent pullback, this junior lithium miner's stock is up 348% over the last year.

What happened

Shares of Lithium Americas (LAC -5.15%), a Canada-based development-stage lithium mining company, declined 11.9% in April, according to data from S&P Global Market Intelligence.

For context, the S&P 500 index returned 5.3% last month.

Two lithium-ion battery packs laying on a flat surface.

Image source: Getty Images.

So what

Lithium Americas didn't release any news last month, nor were there any Wall Street analyst downgrades of the company's stock.

We can probably attribute the stock's April decline to profit-taking. After all, despite a significant pullback since mid-January, shares are still up a whopping 348% over the one-year period through May 3.

What's been driving that powerful gain? The combination of strong long-term demand projections for lithium, which is needed to produce the lithium-ion batteries that power electric vehicles (EVs), and Lithium Americas' progress in developing its two lithium mining projects.

As I've previously written, "In January, the company's Thacker Pass lithium project in Nevada achieved a key milestone: The U.S. Bureau of Land Management issued a Record of Decision for this project following completion of the National Environmental Policy Act process. It expects to receive all remaining state permits and water-right transfers later this year."

The company's second project, Cauchari-Olaroz, is in Argentina. It's a joint venture with China's Ganfeng Lithium, in which Lithium Americas has a 49% interest. Production is expected to start in mid-2022.

LAC Chart

Data by YCharts

Now what

Lithium Americas stock is speculative because the company isn't yet in the commercialization stage. That said, solid progress on its two lithium projects makes this stock worthy of a place on your watch list.

Investors can probably expect material news soon. While the company hasn't yet announced a date for the release of its first-quarter 2021 update, it will likely be within the next week or two.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Lithium Americas Corp. Stock Quote
Lithium Americas Corp.
$21.55 (-5.15%) $-1.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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