Heavy Metal Noise
Great Ones in leather. Earnings fly in the dead of the night.
Albemarle (NYSE: ALB) all comes together, then they shoot out the lights.
It’s your one-way ticket to big gains. Call it lithium.
Earnings were higher than high, but it ain’t feelin’ right. Call it heavy metal noise.
I mean, it has to be noise, right?
Lithium giant and Great Stuff Picks holding Albemarle just beat Wall Street’s earnings expectations for the 13th time in a row! And the company didn’t just beat expectations … it absolutely crushed them so bad that Jamie’s crying.
Hold up! No Van Hagar!
Sorry, it just slipped out. My brain can’t drive 55, apparently.
Anyway, let’s look at the numbers:
- Earnings per share: $3.45 versus $3.04 expected.
- Revenue: $1.48 billion versus $1.43 billion expected.
That’s just impressive. And it’s just the kind of performance I expected when Great Stuff recommended buying ALB stock way back in October 2021.
But wait! There’s more!
Albemarle also lifted its full-year guidance to $20.75 per share on $7.3 billion in revenue. That’s up from May’s boosted guidance of $14.65 per share on $6 billion in sales, and it marks the third time Albemarle has lifted guidance this year!
What’s driving Albemarle’s gains? I’m sure you already know: lithium demand.
Y’all know I’m a hydrogen-power believer, but even hydrogen-powered vehicles need a battery here or there. And modern batteries need modern solutions. That means more lithium.
What’s more, electric vehicle (EV) demand is surging. Maybe not so much here in the states. But globally? Yeah, it’s surging.
In fact, lithium is in such high demand that spot prices have skyrocketed 400% in the past year alone.
“We have shifted our lithium contracting strategy to realize greater benefits from these strong market dynamics,” said Albemarle CEO J. Kent Masters.
That’s some Darth Vader “I have altered our deal. Pray I don’t alter it any further” level stuff right there.
How’s that for pricing power, Wall Street?
So Albemarle’s earnings report was so impressive that ALB stock dropped more than 4%.
I know, right! It was amaz… Wait, what?
Yup.
After a crushing double-beat-and-raise quarter, ALB stock finished the day down.
Why, you ask?
Because Wall Street is really, really worried about this whole recession/stagflation thing. Also, most investors stateside think that it’s going to be a long time before EVs get enough market penetration to matter.
As such, Wall Street sees all investments related to EVs as speculative … even Albemarle.
Never mind that the company has blown past expectations for the past 13 quarters.
Never mind that Albemarle just lifted revenue and earnings expectations for the third time this year.
Never mind that all of Europe will essentially be forced off combustion engines within the next five to 10 years. (Sorry, Bill in Nürnberg … you’re not just old and cranky. Lol.)
Never mind that lithium is a critical component in every single EV battery coming to market — yes, even the much more powerful solid-state batteries.
At this rate, overly fearful Wall Street investors are going to “never mind” themselves into a massively missed opportunity.
Facts are facts. And the fact is that Albemarle is the king of lithium production. It’s reaping massive rewards and growing quickly. But if you follow Wall Street’s lead and wait until EVs are mainstream here in the U.S., it will be far too late.
The bottom line: If you haven’t already bought ALB stock, today’s drop is your call to buy this heavy metal company now!
Are you already holding ALB and looking for other EV plays? Want to stick it to Wall Street and find the underrated plays everyone’s ignoring amid the market panic? Good, because Charles Mizrahi has made a living doing just that.
According to Charles Mizrahi, a tiny company based in California has developed a game-changing new battery. It’ll cost half of what current batteries do — lowering EV prices to $10,000 less than the average gas-powered car.
It’s smaller, lighter and safer … and almost guarantees mass adoption. And this breakthrough tech could be worth life-changing profits.
Click here for the full details on this breakthrough battery.
Going: All Your Coinbase Are Belong To BlackRock
Great Ones, you know how crypto hodlers have always hyped up the idea of more and more institutional investors buying up bitcoin?
And then torrents of cash will enter the crypto market, and all the hodlers will get rich overnight, and yay, everything is gravy in crypto land?
No, not really, but I’m sure you’re about to tell me more.
Right you are! While I can’t comment on certain crypto bandwagoners nabbing insta-riches — y’all keep on dreaming, though, someone’s gotta do it — the other part of their crypto fantasy has now come true.
Institutional investors can now invest in crypto through, who else, but Coinbase (Nasdaq: COIN). How big of a deal is this? How about … as big as the world’s largest asset manager?
Yes indeed, Coinbase is teaming up with BlackRock to give institutional investors “crypto trading, custody, prime brokerage and reporting capabilities.”
Reporting capabilities? Oh boy, oh boy!
Hey, y’all joke, but this means a ton of cash is about to flood into bitcoin, right at a time when many BTC hodlers are down hard, and it’s a massive stroke of confidence for crypto as a whole.
Umm, phrasing, Great Stuff.
I’m not saying that Coinbase is making it back into the Great Stuff Picks portfolio… But I am saying that at least someone at Coinbase HQ has some business sense left after all that NFT nonsense and employee-ranking shenanigans.
Wall Street clearly saw the difference between this partnership and Coinbase’s past attempts at drumming up revenue, sending COIN stock up 31% on the news.
Sadly, however, COIN stock was unable to close above the $100 mark today … which could have led me to recommend buying back in. The BlackRock deal doesn’t completely make up for Coinbase’s prior incompetence … but it comes awfully close. We’re keeping a close eye on COIN stock, let me tell you.
On the other hand … psshh, who’s actually still buying and holding bitcoin? Like, really now. Mike Carr has already said that “buy and hold is dead” … and you can find out why right here.
Going: A BABA Abomination
Alibaba (NYSE: BABA), arguably the world’s largest e-commerce platform, just reported earnings. And if I were a BABA investor, I’d be getting ready to pull a Jack Ma and … umm … run for the hills?
Take an extended “vacation?”
Yeah, let’s say that and stay diplomatic today.
The facts and figures? It’s a double beat:
- Earnings per share: $0.22 versus estimates for $0.20.
- Revenue: $30.7 billion versus estimates for $30.3 billion.
Woot! That’s great! Why … why are you lookin’ upset, Great Stuff?
By the numbers, everything seems to be coming up roses for Alibaba, right?
Wrong. Turns out analysts were a tad too pessimistic — that’s a first for this earnings season — and putting these figures in context, Alibaba is slipping down the steep slope of consumer sentiment.
Why must you speak in metaphors? Spit it out!
This time last year, Alibaba was reporting revenue growth upward of 34%. While the company was conservative and actually predicted a revenue drop for this quarter instead of the flat sales growth it actually posted, analysts saw the writing on Wall Street.
What this signifies is a massive decrease in Chinese consumer spending. After such a growth spurt in sales last year, this year’s flat revenue looks pitiful. It looks even worse when you realize that figure includes a 1% drop in Alibaba’s core Chinese consumer segment.
And we all know how much Wall Street loathes future uncertainty when people stop buying junk…
Gone: As Alibaba, So Below
Gee, if people are spending less money online, I can’t wait to see how Wayfair’s (NYSE: W) earnings report turned out…
So who’s the Wayfairest of them all? Not you, Wayfair: Earnings per share missed the mark — coming in at a loss of $1.94 versus estimates for a loss of $1.90 — but revenue beat, albeit by a mere $100 million.
At first, W investors — not to be confused with winvestors — might worry about that earnings miss, plus the fact that earnings losses continue to mount with every quarter.
But there’s more in Wayfair’s report to be concerned about…
Don’t let that sales beat mislead you. Wayfair’s U.S. revenue fell 9.7%, which is a bummer, but not nearly as horrid as the 35.7% drop in international revenue.
So much for maximum global penetration…
Seriously, are we not doing “phrasing” anymore?
But wait, it gets worse! Active customers fell 24% as of this last report, with that figure accounting for any shoppers using the site within the past year. Yeah — the past year. So all those folks who were still shopping up a storm in 2021? This drop includes that.
And what’s happened in the past year? Virtually everything got more expensive. People started spending their money more wisely … or if not wisely, in a different manner, at least. Gone are all those folks buying up furniture and home goods to make their pads more livable during lockdown. It’s going-out time.
If you’ve got the gas money…
Besides, who stays an active active furniture customer for years on end? Are y’all upgrading coffee tables that frequently? I don’t think so.
It’s no surprise why people are shopping less on Wayfair’s platform, just like Alibaba. But it is a surprise that both stocks kept ticking higher today amid the devastation in their earnings reports, all while Albemarle takes the back seat.
Wall Street … amiright?
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Regards,
Joseph Hargett
Editor, Great Stuff