Why I won’t sell my Galaxy Resources Limited shares

On Friday the Galaxy Resources Limited (ASX: GXY) share price once again raced higher and reached an all-time high of $4.23.

This means the lithium miner’s shares have now gained over 125% over the last six months.

Should shareholders take profit?

While it may be prudent to take a bit of profit off the table if your holding in Galaxy has become an overwhelming part of your portfolio, if your portfolio remains balanced I wouldn’t be in a rush to sell.

In my opinion lithium miners such as Galaxy, Orocobre Limited (ASX: ORE), Kidman Resources Ltd (ASX: KDR), and Pilbara Minerals Ltd (ASX: PLS) have extremely bright futures ahead of them thanks to the rise in electric vehicle and renewable energy usage.

Governments around the world have plans in place to end the production and sale of internal combustion engine vehicles in the next decade or two. This is being done to combat heightened pollution levels.

China, the world’s largest car market, is arguably the driving force behind the move and is incentivising automakers. Unsurprisingly, this has led to a number of Chinese battery companies signing offtake agreements with Australian producers.

And while increasing demand generally leads to increasing supply, this isn’t exactly the case with lithium. Even if all known planned supply comes to market, it will struggle to satisfy the forecast demand.

This is expected to lead to high lithium prices for many years to come, allowing companies like Galaxy to profit greatly.

Ultimately I expect Galaxy to generate high levels of free cash flow, putting it in a position to join fellow resources stars BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) in paying a dividend.

Overall, it is because of this that I intend to hold onto my Galaxy shares for the long-term.

Here are three more exciting shares which I expect to beat the market in 2018. Do you own them?

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!