The Pilbara (ASX:PLS) share price has gained 15% in a month. Here's why this fund manager is still bullish

The global move to green energy is seeing lithium demand surge…

| More on:
One female and two male construction workers laugh on site.

Image 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 Pilbara Minerals Ltd (ASX: PLS) share price is up 15% over the past month.

And this was a month that saw the S&P/ASX 200 Index (ASX: XJO) end flat.

Following on a strong run like this (and indeed a stellar year, as we'll look at below), investors may be wondering if the ship has sailed for the Australian lithium-tantalum producer.

The answer to that, according to Kardinia Capital's portfolio manager Kristiaan Rehder, is a resounding no.

Why this fund manager sees more upside ahead

Speaking with the Motley Fool, Rehder said the Pilbara share price is looking to benefit from 2 strong thematics. First, a likely coming rise in interest rates. Second, and more importantly, the company's tier-1 lithium assets in a world that's moving to green energy.

On the inflation front Rehder said:

If interest rates do lift in an inflationary environment, history shows that equity returns can beat inflation. Equity markets can move higher in a rising interest rate environment as long as earnings growth continues to grow alongside.

In this sort of environment, the commodity and energy sectors tend to stand out.

And when it comes to commodities, Rehder says lithium is hard to beat. And within that space, Kardinia Capital favours Pilbara:

In the resource sector, Pilbara Minerals is a core holding of ours.

Pilbara owns one of the largest hard rock lithium deposits in the world, and has a very long mine life of over 20 years. It has strong exposure to the emerging electrification of the global economy thematic. It is a straight forward mining operation, open pit, in a very stable mining jurisdiction of the Pilbara. It has a high-quality partner. And it has cost advantages over the brine operations in South America.

We expect continued margin expansion for that operation and it can even scale up. And with the recent move downstream to high-grade lithium carbonate we think this story is going to continue to improve.

Pilbara share price snapshot

As mentioned up top, the past month's 15% gain for the Pilbara share price is par for the course for the ASX 200 lithium producer this past year, with shares gaining a whopping 334% in 12 months.

By comparison, the ASX 200 is up 13% in that same time.

Ih early trading today, Pilbara shares are down 1.65% to $2.39.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Man with rocket wings which have flames coming out of them.
Resources Shares

Up 23% today, why Macquarie forecasts this ASX 200 mining stock could rocket another 33%

Macquarie forecasts more outsized gains to come for this surging ASX 200 mining stock.

Read more »

Three mining workers stand proudly in front of a mine smiling because the BHP share price is rising
Resources Shares

Forget gold! This metal just hit record highs and ASX 200 miner BHP is betting big

Let’s find out why.

Read more »

Three miners looking at a tablet.
Broker Notes

Does Macquarie prefer Rio Tinto, Fortescue or BHP shares heading into 2026?

BHP, Rio Tinto, or Fortescue? Macquarie only expects one of the three ASX mining stocks to outperform.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

3 reasons why the Mineral Resources share price is primed to rebound

Can the troubled miner get out of its hole?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

4 reasons to buy this surging ASX All Ords mining stock today

A leading wealth manager expects more outperformance from this surging ASX All Ords miner.

Read more »

Miner looking at a tablet.
Resources Shares

What's Macquarie's price target on Mineral Resources shares?

The mining operator's share price has fallen 55% in the past year.

Read more »

Female miner smiling in front of mining vehicle.
Resources Shares

Pilbara Minerals share price is climbing higher today: here's why

Lithium shares have been hit by a continued decline in prices over the past year.

Read more »

A boy with a gold crown stands stoically looking straight ahead.
Resources Shares

Step aside Pilbara Minerals: This ASX 200 mining stock is eyeing the lithium throne

Changing the lithium landscape.

Read more »