7. Arcadium Lithium plc (NYSE:ALTM)
Market Capitalization as of September 6: $2.43 billion
Number of Hedge Fund Holders: 19
Arcadium Lithium plc (NYSE:ALTM) is a major player in the lithium industry, formed through the merger of Allkem and Livent. The company operates in several key regions known for lithium production, such as Argentina, Canada, and Western Australia. This geographical spread positions it well to meet the rising global demand for lithium, which is essential for the development of electric vehicle batteries and energy storage solutions.
The company uses several methods to extract lithium, including mining from hard-rock sources, traditional brine extraction, and newer technologies like direct lithium extraction. The company produces several important lithium products, such as lithium hydroxide and lithium carbonate, which are used in high-performance batteries.
On September 5, TipRanks reported that TD Cowen analyst David Deckelbaum reaffirmed a Buy rating on Arcadium Lithium (NYSE:ALTM) with a $6 price target. His positive outlook is based on the company’s strategic decisions, including the suspension of operations at the Mt Cattlin mine due to low spodumene prices, which are not covering operating costs.
Deckelbaum views this move as a strategic adjustment to focus on more profitable areas, which should improve the company’s cash flow and financial stability. He also highlighted the company’s emphasis on vertically integrated carbonate production in Argentina and spodumene production in Canada as key factors supporting the positive forecast.
A total of 27 analysts have covered Arcadium Lithium’s (NYSE:ALTM) stock with a price target of $4.31, which represents a 90.69% upside to the company’s stock price at current levels on September 6.
In the second quarter, 19 hedge funds had stakes in Arcadium Lithium (NYSE:ALTM), at a combined value of nearly $52 million.
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.”
