Albemarle: Compelling Value, Timing Is Key

Yong Hee Lee
173 Followers

Summary

  • ALB's valuation is attractive at $82.51, down 75.37% from its 2022 high, with a P/S ratio of 1.83 that is lower than both its historical average and industry peers.
  • Medium to long-term catalysts are strong for lithium. However, short-term market uncertainties warrant caution against taking large positions in ALB right now.
  • I rate ALB a HOLD, with the intention of upgrading my rating to a BUY and/or a STRONG BUY on more incoming data.
  • Key things to watch will be the decline in US capital market yields, signs of rebound in the Chinese economy, and stabilisation/weakening of the USD.

Truck driving on Lithium mine

simonkr

Trade Idea

Albemarle (NYSE:ALB) is the world's largest lithium producer. As I will discuss below, ALB's current valuation looks attractive and there is a compelling long-term investment case for lithium. However, I rate the stock a HOLD for now, with the intention of

This article was written by

173 Followers
I specialize in analyzing fixed income and commodities. Sometimes I do stock picking. Though my horizons are usually medium to long-term, I also pay careful attention to short-term price action. Because I predominantly cover mispriced assets, my analyses are mostly value-driven and contrarian.Note to my readers: I may post rating updates in the comments after publishing (especially if the update does not warrant a whole new article), so please check there for any revisions.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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