Western Areas Ltd shares surge higher: Is it too late to invest?

The Western Areas Ltd (ASX: WSA) share price has continued its strong run on Tuesday and is up 7% to $2.99 in late morning trade.

This brings the nickel miner’s three-month return to approximately 25%.

What happened?

As well as receiving a boost from a solid gain by the market today, Western Areas was given an additional lift from a rising nickel price.

Overnight the nickel price rose sharply as investors became bullish on the metal due to its use in the batteries of electric vehicles.

Up until recently nickel miners such as Western Areas have been overlooked in favour of lithium miners such as Galaxy Resources Limited (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS). But arguably both sets of companies have a lot to gain from the expected electric vehicle boom.

Western Areas and rival Independence Group NL (ASX: IGO), which is also up almost 7% today, are busy building plants that will convert nickel into a powder-like sulfate that can be used in electric vehicle batteries.

Not only is there expected to be strong demand for the sulphate, but it currently trades at a premium to regularly LME-traded nickel according to Reuters. This has the potential to lead to bumper profit growth over the next few years in my opinion.

Should you invest?

While Western Areas is no longer the bargain buy it was a few months ago when I first took a shining to the company, I believe there is still a long-term opportunity for investors here.

As long as improvements in battery technology does not do away with the need for nickel and lithium carbonate, I believe miners of these two metals will be in a great position to profit from the rise of electric vehicles.

This could make Western Areas a compelling, but high risk, long-term investment option.

Lastly, here's a hot tech share which I expect to be a big winner from the electric vehicle boom as well.

Why Elon Musk’s “secret weapon” was the most shorted share in Australia...

On 9 March, the visionary Tesla co-founder and CEO made a bold $63,000,000 to save a large swath of Australia. But in the process, he accidentally revealed the small Melbourne-based company that allows him to consistently make the impossible possible. At one point, this little understood company was actually the single most heavily shorted share in all of the ASX. Yet oddly enough, nine out of 10 analysts call it a screaming BUY! And that includes Motley Fool Australia.

We just isolated this company as Elon Musk’s “secret weapon”, and think it’s dynamic run (up more than double after initially floating shares just two and a half years ago!) is only getting started. For the full story on this company, as well as how to get invested alongside us today, simply click here!

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.