Lithium Americas (Argentina) (NYSE:LAAC) versus Cerro Grande Mining (OTCMKTS:CEGMF) Critical Review

Cerro Grande Mining (OTCMKTS:CEGMF) and Lithium Americas (Argentina) (NYSE:LAAC) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares Cerro Grande Mining and Lithium Americas (Argentina)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cerro Grande Mining	N/A	N/A	-18.16%
Lithium Americas (Argentina)	N/A	-1.37%	-1.08%

Institutional & Insider Ownership

49.2% of Lithium Americas (Argentina) shares are owned by institutional investors. 19.8% of Lithium Americas (Argentina) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Cerro Grande Mining and Lithium Americas (Argentina)”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cerro Grande Mining	N/A	N/A	-$390,000.00	N/A	N/A
Lithium Americas (Argentina)	N/A	N/A	$1.29 billion	$7.79	0.40

Analyst Recommendations

This is a summary of current ratings and price targets for Cerro Grande Mining and Lithium Americas (Argentina), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cerro Grande Mining	0	0	0	0	0.00
Lithium Americas (Argentina)	0	4	3	1	2.63

Lithium Americas (Argentina) has a consensus price target of $7.05, indicating a potential upside of 126.69%. Given Lithium Americas (Argentina)’s stronger consensus rating and higher possible upside, analysts clearly believe Lithium Americas (Argentina) is more favorable than Cerro Grande Mining.

Risk and Volatility

Cerro Grande Mining has a beta of -0.69, suggesting that its share price is 169% less volatile than the S&P 500. Comparatively, Lithium Americas (Argentina) has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Summary

Lithium Americas (Argentina) beats Cerro Grande Mining on 9 of the 10 factors compared between the two stocks.

About Cerro Grande Mining

Cerro Grande Mining Corporation engages in the acquisition, exploration, evaluation, and development of mineral properties in Chile. The company explores for gold, silver, copper, and industrial mineral deposits. It holds interests in Tordillo project, which covers an area of 6,632 hectares located to the southwest of Pimenton; Pimenton mine; and limestone deposits, including Catedral and Cal Norte. The company was formerly known as South American Gold and Copper Company Limited and changed its name to Cerro Grande Mining Corporation in March 2011. Cerro Grande Mining Corporation was founded in 1990 and is based in Toronto, Canada.

About Lithium Americas (Argentina)

Lithium Americas (Argentina) Corp. operates as a resource company. The company explores for lithium deposits. The company owns interests in the Cauchari-Olaroz project located in Jujuy province of Argentina. It also has a pipeline of development and exploration stage projects, including the Pastos Grandes project and the Sal de la Puna project located in Salta Province in northwestern Argentina. Lithium Americas (Argentina) Corp. is headquartered in Vancouver, Canada.