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Is it too late to buy lithium miner shares?

lithium shares

Such is the appetite for lithium miners on the local market at the moment there were no less than six lithium miner shares at 52-week highs on Thursday.

The shares of Galaxy Resources Limited (ASX: GXY), Kidman Resources Ltd (ASX: KDR), Neometals Ltd (ASX: NMT), Orocobre Limited (ASX: ORE), Pilbara Minerals Ltd (ASX: PLS), and Lithium Power International Ltd (ASX: LPI) all reached 52-week highs as investors continue to fight to gain exposure to the industry.

Is it too late to buy the lithium miners?

As a shareholder of Galaxy Resources I am delighted to see its shares continue to defy my expectations and climb higher.

But whilst it was arguably a bargain buy back July, I’m not sure the same can be said for it or any of its lithium miner peers today. At best I think they are about fair value, at worst a touch overvalued.

In light of this I believe they ought to be classed as holds now and would suggest that investors wait for a potential profit taking pull-back before investing.

And if and when that opportunity arises, I think investors should invest with a long-term view and not for a short term trade. Thanks to the rise of electric vehicles and renewable energy I think the majority of these shares have bright futures and the ability to generate significant free cash flow in the future.

Ultimately, this could make them some of the more rewarding investments in the resources sector over the next decade.

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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.

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