Shopify Inc. (TSX: SHOP)(NYSE:SHOP) has been the craze this year with the high-flying tech stock scoring investors returns north of 110% in 2017, and that is after the share price fell off a cliff in early October. However, tech stocks aren’t the only stocks with explosive growth and long-term potential. Cannabis stocks such as Canopy Growth Corp. (TSX: WEED) are also seeing tremendous growth; in just one year, Canopy has also seen its share price double.
Cannabis and tech stocks seem like obvious bets for explosive growth, but there’s a stock in a completely different industry with even greater returns. This stock has more than doubled in just the last three months.
Lithium Americas Corp. (TSX: LAC) is on an incredible trajectory, and this is not a stock you want to miss out on. The company is in its early growth and development stages with 2016 being the first year that the company saw revenue, posting a little more than $1 million in organoclay sales.
However, the company could see sales take off in a few years when production on its lithium brine project in Argentina begins. Lithium Americas entered a joint venture with a South American company in 2016 to develop the Cauchari-Olaroz project. In two stages, the companies plan to develop a capacity at the project for 50,000 tonnes of battery-grade lithium carbonate that could be produced every year.
A feasibility study on stage one estimated a project life of 40 years with an average annual EBITDA of $233 million, with a payback period of a little less than three-and-a-half years.
Strong growth potential in the industry
Lithium ion batteries are used in a wide array of consumer electronics and are also found in hybrid and electric vehicles. Laptops, mobile phones, and cameras are just a few examples of products that use these materials for charging purposes. Some reports have estimated that the market for lithium-ion batteries could reach nearly $70 billion within five years, more than double what it is now.
Especially as electric vehicles become more prominent, lithium-ion batteries could see demand skyrocket even further.
Other projects
Lithium Americas also has a project in Nevada, where it plans to also extract lithium. However, that project is in much earlier stages, and the company does not have an expectation as to when production will start.
The company has an organoclay plant in Nevada as well, owned and operated by its subsidiary, RheoMinerals. In April 2016, sales from these operations began, and in the first six months of 2017, organoclay sales have already reached $2.8 million. Most of the sales have been to oil and gas customers, but there is a possibility for expansion into the animal feed market as well.
Why the stock is a good buy today
Lithium Americas is still in its very early growth stages, but the projects it is working on could create significant growth opportunities in the future, especially as the demand for lithium-ion batteries continues to rise. Unfortunately, without any solid sales or profit numbers, this would be purely a growth play for investors at this point.
