Lithium Stocks: ALB, SQM
Albemarle Corp
Energy, Industrial/Transportation
03/19/2018
Presented
| Date | 03/14/2018 |
| Price | $100.33 |
| Market Cap | $11.09B |
| Ent Value | $14.98B |
| P/E Ratio | 222.96x |
| Book Value | $33.24 |
| Div Yield | 1.34% |
| Shares O/S | 110.51M |
| Ave Daily Vol | 2,303,810 |
| Short Int | N/A |
Current
| Price | $95.74 |
| Market Cap | $11.25B |
| Albemarle Corp. engages in developing, manufacturing and marketing of chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crop production, food-safety and custom chemistry services. It operates through three segments: Lithium and Advanced Materials, Bromine Specialties, and Refining Solutions. The Lithium and Advanced Materials segment consists of two divisions: Lithium and Performance Catalyst Solutions. The Lithium business develops and manufactures basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties and reagents, including butyllithium and lithium aluminum hydride. The Performance Catalyst Solutions division includes four product lines: polymer catalysts, curatives, organometallics and electronic materials. The Bromine Specialties Segment engages in bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Refining Solutions Segment includes two product lines: clean fuels technologies, which is primarily composed of hydro processing catalysts, and heavy oil upgrading, which is primarily composed of fluidized catalytic cracking catalysts and additives. The company was founded in 1993 and is headquartered in Charlotte, NC. |
Lithium Stocks – Short: Albemarle Corp (ALB) and Sociedad Quimica y Minera de Chile SA (SQM)
Publicly traded companies mentioned herein: Albemarle Corp (ALB), Morgan Stanley (MS), Nutrien Ltd (NTR), Sociedad Quimica y Minera de Chile SA (SQM)
Highlights
With the price of lithium having skyrocketed to $15,000 per ton in 2017 and the marginal cost of production sitting at anywhere from $3k - $5k per ton, it is not surprising that new sources of supply started to come online. Supply is now quickly catching up to rising demand and the presenter is short Albemarle (ALB) and SQM. The stocks have already seen declines of ~20% and ~15% YTD, respectively; as the risk of a meaningful drop in the price of lithium is starting to be priced in. However, he sees further downside risk over the next 12 - 18 months if/ when the price of lithium drops further. After all, it is “one of the most common elements found in the Earth’s crust”.
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