Albemarle Comes In Like a Li-Ion
What’s The Deal With Albemarle?
I’m so happy, ‘cause today I found my kicks … at Great Stuff Picks.
I’m so ugly, that’s okay ‘cause I’m in print … and some of you squint.
Light my candles in a daze with Albemarle (NYSE: ALB)! Yeah, yeah!
Oh, I get it! “Lithium” by Nirvana because Albemarle mines lithium. Ha…
Right you are, Ken.
It’s safe to say that energy storage will be one of the biggest — if not the biggest — investment opportunities of this century. I’m not joking.
There’s a sea change going on in energy storage right now, right under your noses. You all see it, Great Ones. You all know it. But you probably know it better as the war between oil and alternative energy.
Right now, oil and fossil fuels are our biggest methods of storing energy. But those energy storage methods are kinda messing up our home. So, we need methods that don’t do that.
But, as many of you Great Ones are keen to point out: The sun isn’t always up! The wind doesn’t always blow! Geothermal sucks! Nobody likes nuclear energy! Yada yada yada….
This, my friends, is where batteries come in. As we all know, batteries allow us to store and transport energy generated somewhere else.
But didn’t you say that you hate batteries, Mr. Great Stuff?
I don’t hate them, per se. I just think there are better energy options for electric vehicles (EVs). Hydrogen is the best option for a multitude of green mobility applications, such as airplanes, semitrucks, buses and other heavy-duty transportation needs.
However, even in those situations, you’ll need batteries of various sizes for supplemental energy, backup power or critical-system fail-safes.
The point is, batteries aren’t going anywhere. And until someone comes up with a miracle method for storing power, lithium-ion (Li-ion) batteries are it. This is especially true for the EV market.
We all know how important lithium is to the new EV revolution. Practically every single EV on the road or in production uses lithium-based batteries. Heck, even Solid Power (Nasdaq: DCRC) and QuantumScape (NYSE: QS) need lithium for their revolutionary new solid-state batteries. Remember, we talked about both stocks last week.
With everyone and their Chinese mother making EVs these days, the demand for lithium is set to skyrocket. Analysts, including these fine people over at Grand View Research, believe that lithium demand will rise roughly 600% by 2025. That’s in, like, four years!
What’s more, most of Europe has pledged to cut reliance on oil or even kill the combustion engine completely between 2030 and 2050. That means even more lithium demand in the future!
Albemarle Is The Best Marle
So, where will that lithium come from? (Hint: Read the subhead above!)
You guessed it: Albemarle, the world’s top lithium producer.
Sure, Albemarle also develops, manufactures and markets other specialty chemicals. But nobody really cares about those.
I mean, bromine? Sure, fire retardants are good and all … but they’re no lithium when it comes to your investment dollars.
Wait … I just had an idea. What if Albemarle starts doing a two-for-one deal with lithium and bromine? You know, for those EVs that keep catching fire? Just a thought…
Prior to the COVID-19 debacle, Albemarle averaged about 10% revenue growth per year. 2020’s pandemic-induced shutdowns all but eliminated that growth … but that goes without saying.
Currently, Albemarle is ramping up for a post-pandemic world, and it’s doing so in style. The company bested Wall Street’s earnings expectations in each of the past four quarters by an average of nearly 17%.
And if you’re wondering just who’s buying all this lithium from Albemarle, look no further than the biggest battery makers on the planet: Panasonic, Samsung SDI and Corning.
Combined with competitors BYD, CATL and LG Energy Solutions, these six companies supply 87% of the EV batteries on the market … including batteries for Tesla, so you know they’re serious.
In other words, Albemarle’s customers are in rarified air in the EV industry. The big boys. The head honchos.
(By the way … with EV growth set to surge 1,150% by 2030, there’s still a lot of money on the table. The absolute best way to play EV stocks? Click here now.)
Light My Candles In A Daze
All right … we have the financials, the growth and the industry nailed down. What about Albemarle’s stock? Let’s take a look-see:
ALB Was Bullish Over The Last Year
You can clearly see a solid bullish uptrend — an uptrend that actually dates back to April 2020, right after the March pandemic crash. Throughout this uptrend, ALB stock has benefitted from price support at its 50-day moving average (the blue line).
Right now, ALB stock is in a consolidation pattern. You see, the shares went on a bit of a tear from July through August and got a bit overbought.
ALB is now working off that excessive buying as investors take profits, establish positions and generally just digest the stock’s gains over the past several months.
You should also note that ALB stock is currently perched on its 50-day moving average. In other words, if the stock’s past performance holds true, investors are in for another leg higher very soon.
And that means … it’s time to buy!
But, before we buy ALB, let’s establish a couple ground rules.
- I’m setting an initial buy range between $190 and $240. ALB stock and the market as a whole have been a touch volatile lately, and we want to be careful. I’m looking at you, inflation fears!
- I’m also setting a stop-loss point at roughly $170. Looking at the chart above, you’ll notice ALB’s 200-day moving average (the red line). Any trade below this line is a sell indicator. Right now, that line rests at about $170, so that is your first sell point … which will rise as the 200-day moving average rises. Again, we’re doing this to be on the safe side.
- This is a long-term, buy-and-hold position. We’re banking off growth in the EV industry and skyrocketing demand for lithium. If anything changes in the EV or battery market, such as hydrogen suddenly gaining the upper hand, our outlook will change. But I’ll be sure to update you if that happens.
That’s it, Great Ones. Those are our guidelines. Now, go forth and…
Buy ALB stock.
Now, Great Ones, maybe lithium isn’t quite the Nirvana of EV investing you want (shout-out to all you hydrogen homies out there). Don’t worry one bit, we’ve got all you EV fiends covered:
A former Tesla employee released a brand-new innovation promising to make every EV out there instantly obsolete. Some call this man “Employee No. 7.” Even the “Godfather of the EV Revolution.” (But no one calls him Maurice.)
He created the first working Tesla battery. Now he’s about to change everything again.
Thanks for tuning in to my Great Stuff talk! If you have a stock or investing idea you’d like to see covered in the Great Stuff weekend edition, let us know at: GreatStuffToday@BanyanHill.com.
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Until next time, stay Great!
Editor, Great Stuff