In the last 30 days the Galaxy Resources Limited (ASX: GXY) share price has easily been one of the best performers on the market.
During this time its shares have risen a massive 38% compared to a 1.2% gain from the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Are Galaxy shares still a buy?
While I think that Galaxy is one of the best long-term buy and hold investment options in the resources sector, I do think that its shares are about fair value now and offer only limited upside potential in the short-term.
For this reason, I would class the lithium miner as a hold and would suggest investors look for buying opportunities in or around the $2.80 to $2.90 level.
I feel the same can be said for lithium miner peers Orocobre Limited (ASX: ORE), Pilbara Minerals Ltd (ASX: PLS), and Kidman Resources Ltd (ASX: KDR), which I would all class as holds.
The lithium miners have all run hard in recent weeks as investors become increasingly bullish on the outlook for global lithium demand following plans by governments around the world to ban internal combustion engine vehicles in the not so distant future.
Such a move is expected to accelerate the adoption of electric vehicles, leading to an increase in demand for lithium carbonate which powers the batteries inside them.
Whilst lithium supply is of course expected to increase as a result, supply and demand is still forecast to remain incredibly tight for the foreseeable future. This should allow Galaxy and its peers to realise high lithium carbonate prices that puts them in a position to generate high level of free cash flow.
But with this mostly baked into their respective share prices now, I wouldn't jump in today expecting the next 30 days to be as positive as the last 30 days.
All in all, whilst I am bullish on the lithium miners in the long-term, I think now might be a good time to hold fire and wait for better entry points.
