6. Arcadium Lithium plc (NYSE:ALTM)
Short Interest as % of Shares Outstanding: 7.31%
Number of Hedge Fund Holders: 19
Arcadium Lithium plc (NYSE:ALTM) is a significant player in the lithium production industry and it was formed from the Allkem-Livent merger in January 2024. With interests in various properties across Argentina, Canada, and Western Australia, the company is well-positioned to meet the growing demand for lithium, a critical component in battery manufacturing for EVs and energy storage systems.
As a global producer of lithium chemicals, the company is involved in a range of extraction processes, including hard-rock mining, conventional brine extraction, and direct lithium extraction (DLE). It produces a variety of lithium products essential for high-performance batteries, such as battery-grade lithium hydroxide, lithium carbonate, and butyllithium. These products support multiple industries, including automotive, electronics, agriculture, and pharmaceuticals.
The company is focusing on investments to enhance production capabilities. In August, it acquired Li-Metal’s lithium metal business for $11 million. The acquisition is expected to boost the company’s production of lithium metal and specialty products, especially its butyllithium and other specialty chemicals. This move aims to create the scale needed to meet the increasing demand for next-generation battery materials derived from lithium metal.
Despite recent challenges in the lithium market, including an oversupply, Arcadium Lithium (NYSE:ALTM) has managed to maintain its performance. The company reported EPS of $0.05 and sales of $254.5 million for Q2, showing an 8% increase from the previous year.
On August 9, KeyBanc lowered the price target on the stock to $8 from $9 but maintained an Overweight rating. KeyBanc notes that the company is appropriately adjusting its capacity expansion plans and focusing on its balance sheet amid the current market downturn.
Arcadium Lithium (NYSE:ALTM) was part of 19 hedge funds’ portfolios in the second quarter with a total stake value of $51.99 million. It takes the 6th spot on our list of the best battery stocks to buy according to short sellers.
First Pacific Advisors stated the following regarding Arcadium Lithium plc (NYSE:ALTM) in its Q2 2024 investor letter:
“Arcadium Lithium plc (NYSE:ALTM) is an integrated, low-cost, well-managed lithium producer formed by the merger of Livent, which the Fund owned, and Allkem in Australia. The merger was completed at the beginning of the year and we received, and decided to hold, shares of Arcadium. The share price has declined because of volatile lithium prices that collapsed from bubbly levels at the beginning of 2023.27 Estimates for electric vehicle production are slowing and capacity got ahead of demand; the industry is now waiting for a supply response.
Arcadium is an unusual investment for us. We normally avoid the commodity and materials sectors, and have kept our position in Arcadium small. But we believe Arcadium has a unique position in an industry with a strong long-term outlook. The company has low-cost production assets, is virtually debt-free, and has considerable capacity additions planned near-term.”
