“Battery Boom: Lithium Power Tripler by Thanksgiving” Navellier

By Travis Johnson, Stock Gumshoe, July 21, 2008

I’ve written probably far too many notes here about teasers from the esteemed Louis Navellier of late, but I can’t help it — his ads are making fairly huge promises (none yet kept), and they are arriving in a deluge. Perhaps ignoring them would be the saner path, but no one ever accused the Stock Gumshoe of an excess of sanity (it is, after all, a strange and lonely pursuit to chase the investment teasers down into their labyrinthine lairs).

But anyway, we’re one paragraph in here … so I’ve committed. We’ll solve this one and discuss it, should you please, and perhaps this time Louis will come through with a promise that’s achievable.

Thankfully, this time he doesn’t promise that it will double by next Friday, though he does still make some bold assertions:

If you don’t make 50% on this stock, you’ll get Global Gains free. (This is no different than the standard newsletter deal, just to be fair — most of them give a trial period for cancellation, and many will refund unused months upon request)

… and …

The stock should triple, to $150, by Thanksgiving. It might not be a bad idea to lock in those tickets to go see Aunt Mildred in Kenosha with the way fares are rising, but Thanksgiving is still quite some time away — so he’s got four months to make good on that triple. I wouldn’t take even money on it, to be honest, but who knows, perhaps he’ll be right.

But you want to know what the company is, don’t you? We’ll keep moving.

This ad first showed it’s face on July 12, as far as I’ve seen, and it was then called the “Lithium Power Tripler” and he went into some detail about why he likes the potential of lithium batteries for automobiles, including some bla bla bla about BMW and their planned electric engine for the Formula 1 circuit, and the lower cost of electric cars, and the advances moving battery technology forward, etc. etc. etc. You’ve probably heard much of that elsewhere.

Here’s the text he teased us with ten days ago:

“Two names invariably come up at this point: FuelCell Energy and Plug Power. Both have a long learning curve ahead of them, and rate a “fail” grade on my Portfolio Grader System. So, no dice there.

“That discovery drove me up the supply chain, looking for an A-rated lithium tech stock. Car manufacturers? Even Toyota gets a D, and The Big Three, well, don’t even ask.

“At last I found the PERFECT lithium-tech stock, a true A rated beauty across 11 different filters: a lithium mine. And here at Global Growth we’re buying every share we can get our hands on.

“…in buying the world’s biggest lithium mine, we put ourselves at the very head of the line for the coming battery boom. Our profit-stream starts flowing now.”

Hard not to agree with him about the electric engine and battery companies — there seem to be millions of them, and most of them are far from profitability and, it seems to me, will be stuck fighting it out in a commodity market for batteries if and when this technology goes mainstream (I could be wrong there, of course, but I’m certainly not one to bet on which battery company will be the strongest one of the next decade). And it’s not surprising that all these companies rate poorly on his portfolio grader service, since that is focused largely on earnings growth and upside surprises and raised estimates … both of which are hard metrics to dominate when you’re unprofitable.

But anyway … I hope you noticed that little bit at the bottom of the quote — “buying the world’s largest lithium mine” … that’s certainly enough to lock down our sleuthing job for the day, but let’s see what else Louis tells us about the company first.

It has doubled in the last three months.

It was up 25% in the second week of June.

And he foresees “Nascar profits in a stalled out market” with a double by Labor day, and a triple by Thanksgiving. Labor day is just about six weeks off or so, so I may have to take it back about Navellier not making outlandish predictions. It’s not as crazy as many newsletter “promises”, but 50% in six weeks is something not many folks have the ability to predict (and I think I wouldn’t be terribly out of line saying “guess” instead of “predict”).

So what is our lithium miner?

Well, as you may have guessed, there ain’t that many of them … and this one is still right around where it was when Louis started touting it ten days ago, the company we’re looking at here is …

SQM (SQM)

This would be my opportunity to show off some mastery of Spanish spelling, but thankfully they mostly call themselves plain old SQM now. This is indeed primarily an agricultural play, a Chilean miner that produces prodigious amounts of nitrates and other natural fertilizers, as well as iodine, lithium, a bunch of other fertilizers and industrial chemicals, etc., f