1. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 32
Short % of Shares Outstanding: 10.09%
Headquartered in Charlotte, North Carolina, Albemarle Corporation (NYSE:ALB) is a global manufacturer and marketer of engineered specialty chemicals. It is considered as one of the best chemical stocks as the company operates through three primary segments: Energy Storage, Specialties, and Ketjen. The Specialties segment focuses on providing bromine-based specialty chemicals and producing cesium products for the chemical and pharmaceutical sectors.
In Q2 2024, Albemarle Corporation (NYSE:ALB) reported net sales of $1.4 billion, a 40% decline compared to the previous year due to weaker pricing conditions. This drop significantly impacted earnings, with a net loss of $188 million, primarily due to capital project write-offs at its Kemerton site.
The specialty segment saw a decline in EBITDA for the quarter, driven by raw material sourcing issues and a freeze at the Magnolia site, although improved bromine pricing helped mitigate the impact of lower lithium specialties prices. Overall, Albemarle Corporation (NYSE:ALB) increased its adjusted EBITDA by 33% sequentially, fueled by higher sales volumes across all segments, particularly in its Talison JV, which helped mitigate some pricing pressures.
The company’s liquidity remains strong, with $1.8 billion in cash and $3.5 billion in available resources. Albemarle’s future outlook focuses on maintaining lithium prices at $15 per kilogram, despite market softness, while leveraging operational efficiency.
The stock saw a 1.50% increase in the stock price over the past month, possibly attributable to being named one of TIME’s ‘World’s Best Companies,’ a recognition based on factors such as employee satisfaction, revenue growth, and sustainability, which likely boosted investor confidence.
However, its 36.42% YTD decline reflects a 39.7% revenue drop, weaker lithium prices, and ongoing supply chain challenges affecting long-term performance.
Of 912 hedge funds tracked by Insider Monkey, 32 hedge funds with a combined investment of $485.0 million remain bullish on the stock as of Q2 2024, according to Insider Monkey’s database.
Albemarle Corporation (NYSE:ALB) ranks first on our list of specialty chemical stocks according to short sellers. While we acknowledge the potential of ALB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ALB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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