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.
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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.
