Opinions
The Panic-Proof Portfolio (Stockchase Research)
Livent Corporation
LTHM-N
PAST TOP PICK
Mar 26, 2024
$16.510
Stock price when the opinion was issued
chemicals
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SELL ON STRENGTH
Lithium stocks rocekted from mid-2020 to late-2021. Stocks have fallen but not lithium itself which tripled in 2021 and added another 130% so far thsi year, up 800% since end-2020. Lithium stocks are reporting earnings and reflecting that price, so shares are starting to climb. Even if the economy slows down, the demand for lithium batteries will continue to rise. There's no shortage of lithium, but extracting it takes a long time and a lot of capital. The two main players are Livent and Albemarle. Once a dud, but thriving in the current lithium boom. Their last report revealed a monster earnings beat and raised their full-year forecast a lot, hiking revenue guidance by 40% and EBITDA by 78%. Shares soared 30% the next day and remains surprisingly resilient in this harsh market. Take profits, because this boom won't last forever.
chemicals
TOP PICK
Stockchase Research Editor: Michael O'Reilly
LTHM is a producer of high purity lithium and has contracts with EV manufacturers such as Tesla and BMW. It is expanding into Argentina and just signed a partnership with an Australian miner. It trades at 1.4x book, 8x earnings and supports a 24% ROE. We recommend placing a stop-loss at $11, looking to initially achieve $17 -- upside potential of 30%. Yield 0%
(Analysts’ price target is $24.52)
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Our PAST TOP PICK with LTHM has been acquired in a merger and the shares have ceased trading. This position is considered closed now.