Lithium remains a hot theme among S&P/ASX 200 Index (ASX: XJO) investors as the transition to net zero emissions gathers pace.
But there is a plethora of choices for ASX lithium shares, so it can be confusing to know which one to put your money into.
Fortunately, Shaw and Partners senior investment advisor Jed Richards this week revealed his buy tip for punters:
Lifting production in 'stable jurisdiction'
Despite short-term fluctuations, according to Richards, demand for lithium is heading upward in the long run as the green energy transition rolls on.
"Analysts don't see an alternative to the lithium-ion battery in decarbonising the global auto fleet," Richards told The Bull.
And while there are many players that produce the mineral, stability is important to his team.
"Pilbara Minerals Ltd (ASX: PLS) is our preferred lithium company, as it has a good operation in a stable jurisdiction.
"The company lifted production and sales in the 2023 June quarter compared to the prior quarter. It pays a dividend from its healthy cash position."
Pilbara indeed has many fans in the professional world.
CMC Markets currently shows 10 out of 17 analysts rating the miner as a buy.
The Pilbara share price has already risen more than 30% since the start of the year.
But there could be a neat buying opportunity at the moment after the stock dropped almost 12% on Friday.
The importance of taking a long-term view
Richards also recommended another bargain buy in CSL Limited (ASX: CSL), which has fallen 12.3% since 13 June.
"The biotechnology giant was sold off aggressively in June following a trading update that missed positive market expectations."
Those fleeing the stock are not taking a long-term view, as far as Richards is concerned.
"Investors appear too narrowly focused on CSL's legacy businesses at the expense of the newer growth opportunities that are showing potential."
He called for the true investors to look past the immediate fear.
"I see the company as oversold, with potential bad news already priced into the stock.
"CSL remains a market leader in its field."
The biotech stock is also popular with professional investors, with a stunning 16 out of 18 analysts surveyed on CMC Markets currently rating it a buy.
