10 High Risk High Reward Growth Stocks Stocks To Buy

5. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders In Q2 2024: 32

Albemarle Corporation (NYSE:ALB) is a chemicals company that is one of the biggest lithium providers in the world. This places it in a key position to benefit from the surge in global electrification through the growing use of electric vehicles and energy storage platforms. At the same time, it also makes Albemarle Corporation (NYSE:ALB) vulnerable to commodity pricing shocks, particularly in a weak economic environment. EVs and other green energy products typically perform well when consumer spending power is high, which in turn increases the demand for Albemarle Corporation (NYSE:ALB)’s products. Therefore, it’s unsurprising that the shares are down 57.5% over the past twelve months as high rates have depressed the demand for electric vehicles. Albemarle Corporation (NYSE:ALB) could see further turbulence in the future if the West increases tariffs on Chinese EVs and sluggishness in the EV industry makes battery manufacturers go out of business.

The London Company mentioned Albemarle Corporation (NYSE:ALB) in its Q2 2024 investor letter. Here is what the fund said:

“Sold our remaining position in ALB after the stock triggered our soft stop loss review. We are concerned that weaker demand in the US for electric vehicles coupled with greater than expected supply of lithium reaching the market may lead to declining lithium prices. This will likely lead to lower cash flow generation in the years ahead, which weakens the downside protection case for the stock.”