3. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Short Interest as % of Shares Outstanding: 2.27%
Number of Hedge Fund Holders: 9
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is a leading Chilean company recognized globally for its production of lithium, iodine, and specialty plant nutrients. It is the world’s largest lithium producer. The company was founded in 1968 and over the years, it has expanded its operations internationally.
The company has become a key player in the global supply chain for essential minerals like lithium, which is vital for the production of batteries used in EVs and renewable energy storage. It is among our best battery stocks to buy now according to short sellers.
The company has operations in 110 countries across 5 continents. It has a unique advantage due to its exclusive access to the world’s largest and richest deposits of caliche and brine, located in the Atacama Desert between Chile’s First and Second Regions. These resources provide the company with extensive reserves of essential minerals, including the largest reserves of iodine and nitrate, along with the highest concentrations of lithium and potassium ever recorded.
Additionally, starting in 2017, Sociedad Química (NYSE:SQM) began expanding its geographic reach, particularly in lithium production. This expansion includes acquiring new lithium resources from spodumene in Western Australia through a partnership with Kidman Resources, further strengthening its global presence in the lithium market.
According to its 2023 annual report, the company continued expanding its production capacity across its main business lines. In the lithium sector, the company increased its Lithium Chemical Plant’s capacity to 200,000 metric tons of lithium carbonate by the end of 2023 and aims to reach 210,000 metric tons in 2024. It also began operations at its Mt. Holland mining and concentrator facilities and is on track to complete refining capacity in Kwinana, Perth, by 2025. Additionally, the company refurbished a lithium hydroxide plant in China and began production using lithium sulfate from the Salar de Atacama.
As of 2023, Sociedad Química (NYSE:SQM) sold lithium products to 207 customers across 39 countries, with 92% of sales going to Asia. The company’s largest customers accounted for about 67% of its revenues. In 2023, the company held an 18% market share in lithium production.
As of August 9, Goldman Sachs sees long-term potential in the company. The firm’s analyst, Marcio Farid, upgraded the stock from a Neutral to a Buy rating, while keeping the price target at $46.50 per share, as reported by The Fly. Farid believes that the potential rewards of investing in the stock outweigh the risks. The analyst noted that the company is strategically positioned to benefit from an anticipated improvement in the lithium supply and demand dynamics by 2027.
In Q2, 9 hedge funds had stakes in Sociedad Química y Minera de Chile S.A. (NYSE:SQM), at a combined value of $44.8 million. Kopernik Global Investors initiated a position with 640,997 shares, worth $26.12 million in the company and is the biggest shareholder of the company, as of June 30.
