I've been following lithium since 2015-16. It has been boom and bust the entire time. 18 months ago there were over 450 companies with one or more Li projects or properties. Over 230 in Canada alone.
Today, that number has been halved (even though many Li dreadfuls haven't admitted it, they're dead). There's a misconception that Li demand is weak when it's not. EV sales were +25% last year and Battery Energy Storage System demand was up >50%. Supply is the problem, but loss-making, low-quality, very low-grade, Li-bearing materials in logistically challenging places is not sustainable.
Admittedly, these materials have been sustainable for two years, but the impact will fall as demand grows and the easiest material is exploited.
Winsome is down 88% from its all-time high, yet it's a top 5% name in the sector (in my opinion). Typically, stocks down 88% are bottom-quartile opportunities, sometimes weighed down by onerous debt, dependent on multiple factors falling into place.
Winsome needs just two things, a Li price rebound and a strategic partner. I'm confident in both, a partner within six months, and Li price relief within 6-18 months.
I could be wrong! But, buying one of the best names in a sector, when there's blood in the streets, can lead to strong returns.
WR1 Price at posting:
31.5¢ Sentiment: Buy Disclosure: Held
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