ALB

Albemarle Benefiting from Improved Lithium Market Conditions

by

Image Source: TradingView By Brian Nelson, CFA Albemarle Corp (ALB) recently reported fourth quarter results that were mixed. Revenue beat expectations, but non-GAAP earnings per share came up a bit short. Fourth quarter net sales were $1.4 billion, up 16%, led by gains in all of its segments. Adjusted EBITDA in the quarter of $269 million was up 7% led by Energy Storage and Ketjen. Albemarle posted an adjusted diluted loss per share of ($0.53). Management had the following to say about the results: Our results for the fourth quarter and full year 2025 are a testament to our team’s focus on execution amid dynamic market conditions. Albemarle achieved year-over-year sales growth of more than 15% in the fourth quarter, … Read more

Albemarle Is Getting Back on Track

by

By Brian Nelson, CFA On November 5, Albemarle (ALB) reported better than feared third quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Net sales came of $1.3 billion declined modestly, while the company reported an adjusted loss of $0.19 per diluted share, up from an adjusted loss of $1.55 in the prior year period. Adjusted EBITDA came in at $226 million, up 7% due to improved fixed cost absorption and ongoing cost savings. Albemarle is on track to achieve full-year run-rate cost and productivity improvements of roughly $450 million, better than its initial target of $300-$400 million. Management had the following to say about the results: Our team delivered strong third quarter results, with … Read more

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

by

Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Albemarle Targets Positive Free Cash Flow for 2025

by

Image Source: TradingView By Brian Nelson, CFA Albemarle (ALB) recently reported better than feared second quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. Net sales of $1.3 billion included volume growth in Energy Storage and Specialties, but the measure still fell 7% versus the prior-year quarter. Adjusted EBITDA was up sequentially, to $336 million, thanks in part to improved fixed cost absorption, ongoing cost savings, and Energy Storage product mix. Adjusted diluted earnings per share came in at $0.11 versus $0.04 in the year ago period. Management had the following to say about the results: We delivered strong second quarter results and are maintaining our previous outlook considerations assuming current lithium market pricing persists. … Read more

3 Undervalued Stocks to Consider Buying Now

by

Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Albemarle Continues to Navigate a Low Lithium Price Environment

by

Image Source: TradingView By Brian Nelson, CFA Albemarle (ALB) recently reported mixed first quarter results, with revenue coming in slightly lower than forecast, but its bottom-line loss was less than feared. Net sales fell 20.9% in the quarter due to lower pricing in Energy Storage, while adjusted EBITDA fell 8.3% as lower net sales were mostly offset by lower average input costs and ongoing cost reduction efforts. Adjusted diluted loss per share swung to a loss of $0.18 from a gain of $0.26 in the same period last year. Management had the following to say about the quarter: Our business continues to perform in line with our outlook considerations, including first-quarter adjusted EBITDA of $267 million with strong year-over-year improvements … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

by

By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Trump Tariffs Higher than Expected; What We’re Doing

by

By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Albemarle Has Line of Sight to Breakeven Free Cash Flow in 2025

by

Image Source: Albemarle By Brian Nelson, CFA On February 12, Albemarle (ALB) reported weak fourth quarter results with both revenue and non-GAAP earnings per share falling below the consensus forecast. Revenue dropped nearly 48% in the quarter due to lower pricing and volumes in its Energy Storage division, but net income, adjusted EBITDA, and diluted earnings per share attributable to common shareholders swung to profitability in the fourth quarter. Adjusted diluted loss per share improved to $1.09 from $5.19 in the same period a year ago. Management had the following to say in the press release: We are taking decisive actions to reduce costs, optimize our conversion network and increase efficiencies to preserve our long-term competitive position. As we look … Read more

Albemarle Pursues Efficiency in the Wake of Lower Lithium Prices

by

Image Source: Albemarle By Brian Nelson, CFA On November 6, Albemarle (ALB) reported mixed third quarter results with revenue outpacing the consensus forecast, but non-GAAP earnings per share coming up a bit short. Net sales fell to $1.36 billion from $2.3 billion in the year-ago period as a result of depressed lithium prices, while adjusted EBITDA came in at $211 million versus $653 million in the same period last year. Its adjusted EBITDA margin fell 1,200 basis points in the quarter on a year-over-year basis, while adjusted diluted loss per share was $1.55. Management had the following to say about results: Our steadfast focus on execution allowed us to deliver solid third-quarter results and maintain our full-year 2024 corporate outlook … Read more