Could This Undervalued Canadian Stock Be Your Ticket to Millionaire Status?

Not every millionaire-maker stock is a consistent grower. Some are temporary but substantial bullish opportunities that you can ride to exceptional gains.

| More on:
how to save money

Source: Getty Images

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 world is changing in more ways than one. Significant shifts like moving away from fossil to renewables are impacting multiple facets of our society, from personal preferences to the global economy. But even though we have taken several significant strides towards decarbonizing, there are still several practical/engineering hurdles. One of them is energy storage.

For now, we rely heavily on lithium Ion batteries for everything from electric vehicles (EVs) to solar farms where the electricity is stored. This made lithium and other metals used in the battery highly coveted. Lithium prices rose rapidly, and so did the stock of many lithium companies, including Standard Lithium (TSXV:SLI).

The company and the lithium economy

Standard Lithium is headquartered in Vancouver but operates exclusively in the United States. It has two projects: one in California and one in Arkansas and Texas. The company is developing its flagship project for Direct Lithium Extraction (DLE) and has a strong focus on sustainability. It is at least a year away from actual production (set for 2026), but the current feasibility studies are quite promising.

It’s expected to produce both lithium hydroxide monohydrate (LHM) and lithium carbonate, which may have different applications. The first is preferred for high-power density applications like EVs, while the other might offer more affordable power storage solutions as they are cheaper to refine.

When the EV boom started, many companies started securing contracts for lithium. This encouraged investors to start investing heavily in lithium companies, hitching an early ride to their financial profitability. Many companies, including Standard Lithium, experienced powerful growth. This particular stock grew over 1,600% in less than two years.

Stock’s prospects

The stock is heavily discounted, trading below 83% of its five-year peak. But it did start showing signs of a recovery. In 2024, it experienced one minor and one significant growth surge, over 120%, in less than two months.

It’s also heavily undervalued, trading at a price-to-earnings ratio of just three. The company has minimal debt and over $39 million in cash, so the company will likely be able to sustain its operations without incurring debt in the future.

Created with Highcharts 11.4.3Standard Lithium PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Lithium prices might make a comeback. The growth might not be too substantial, but in the heavily discounted state of the stock, even a modest upward trend can cause the stock to shoot up, as it did in 2024.

With a significant enough investment, solid gains offered by the stock (ideally similar to its early days’ bullish trends) can help you enjoy massive gains. It may even be enough to push your portfolio into the million-dollar territory.

Foolish takeaway

Another aspect of Standard Lithium is environmental, social, and governance investing. If you want to invest in green, sustainable stocks, Standard Lithium can be a promising pick for two reasons. One is the nature of its business, as it literally facilitates sustainability. Second, by pursuing sustainable production techniques, Standard Lithium can also reduce the secondary emissions associated with lithium production.

Should you invest $1,000 in Standard Lithium Ltd. right now?

Before you buy stock in Standard Lithium Ltd., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Standard Lithium Ltd. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman 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.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

Start line on the highway
Stocks for Beginners

My Top 5 Canadian Stocks for Beginning Investors

A market correction is a good time for new investors to begin their investing journey. These five Canadian stocks can…

Read more »

nugget gold
Metals and Mining Stocks

2 Materials Stocks I’d Buy With $20,000 Whenever They Dip in Price

Teck Resources and Agnico-Eagle Mines offer quality materials stock exposure at a time when both companies are thriving.

Read more »

Asset Management
Stocks for Beginners

Top Canadian Stocks to Buy for Long-Term Gains

Canadian stocks really can offer it all, especially when looking at long-term growth in these few.

Read more »

dividend growth for passive income
Dividend Stocks

Why I’d Invest in Canadian Value Stocks for Both Stability and Growth

Three Canadian value stocks are buying opportunities for investors looking for stability and growth.

Read more »

investment research
Dividend Stocks

Got $15,000? 3 Blue-Chip Stocks Every Canadian Should Consider

Here's why investing in blue-chip TSX stocks such as CNQ and CNR should derive outsized gains in 2025 and beyond.

Read more »

A plant grows from coins.
Energy Stocks

2 Discounted Dividend Stocks With Significant Growth Potential

If you’re in search of income and capital appreciation in the long run, here are two discounted Canadian dividend stocks…

Read more »

protect, safe, trust
Dividend Stocks

Where I’d Allocate $20,000 in 2 Safer High-Yield Dividend Stocks for Retirement Needs

Here are two safer, high-yield dividend stocks I'm looking at for my retirement needs.

Read more »

Senior uses a laptop computer
Energy Stocks

Here’s How Investors Can Turn $15,000 in a TFSA Into $235,000

Energy stocks aren't created equal, and this one might be one of the best of the batch.

Read more »