Lithium Americas Stock on Thin Ice With Earnings Report in Question
There's a technical warning for this once-promising small-cap rare earths name.
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I Found a 'Rare' Opportunity for Raw Material Investors
"Stocks Under $10" name and struggling Sarge-folio holding Lithium Americas (LAC) is set to report the firm's fourth quarter financial results either late this week or early next week. Beats me.
My trading platform tells me that the firm will go to the tape on Thursday, March 19, ahead of the opening bell. My platform even tells me that this is confirmed. Just one thing: I can't find the press release confirming this and it's not on Lithium Americas' website.
Going to my usual sources for such information, I see March 19, March 23, March 27 and some date way out in May as possibilities. I trust none of these, I guess, until we hear from the firm itself.
Regardless of when the firm does release its digits, I am highly displeased with this stock's performance and am honestly pretty close to kicking it to the curb.
For the fourth quarter, Wall Street is looking for a GAAP EPS of -$0.06 on revenue of exactly $0 and zero cents. This will now be years with no sales. The reason that the firm caught my attention in the first place was the U.S. Department of Energy (DoE) having taken a 5% stake in the company and the agency's separate 5% stake in the firm's Thacker Pass joint venture with General Motors (GM) . That particular site is believed to be home to the largest deposit of Lithium anywhere in the western hemisphere.
Thacker Pass
In mid-February, Lithium Americas announced that it was targeting $1.3 billion to $1.6 billion in capital spending for Phase 1 of the Thacker Pass project in Nevada for the full year 2026. The firm acknowledged some tariff exposure as it would have to source equipment and construction materials from Canada, China, India, the UAE, Turkey and the EU. Countering that, the firm had secured $2.23 billion in financing from the U.S. DoE loan program.
A Technical Warning!
Readers may recall that back in mid-January, I showed you what I saw as a double-bottom pattern of bullish reversal. It was not a mirage. We could have sold the shares as high as $6.96. I did not. I had a $7.75 target price. At that price, the Sarge-folio would have turned a 37% profit. There are, however, no shouldas, wouldas, couldas in baseball, nor are there in trading.
What I see now is a descending triangle of bearish trend continuance with a $4.30 downside pivot. I am hanging on to my long position for now, as that pivot has provided support despite being tested repeatedly since November.
Should that line crack, understand this: I will be out of this stock quicker than Vice Coleman legging out a triple.
I'll give the firm a chance to impress upon its earnings release and press conference. Not more than that, should they not please Wall Street. My patience wears thin and this name has become an eyesore on my book.
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At the time of publication, Guilfoyle was long LAC equity.
