Brenda Vingiello, CIO, Sand Hill Global AdvisorsAlbemarle CorpALBPARTIAL BUYAug 04, 2023

Lithium exposure good for investors. Speculative investment given nature of commodities. Don't get over exposed. Balance in portfolio. 

There's lithium everywhere. It's going to be an opportunity for EVs. But if you look at the price of a giant like ALB, the shares have come down, and that's just gravity taking hold of high valuations. If you need to sell, sell. Restructuring restricted share trading earlier this week.

They'll move 1.9 million metric tons (of lithium) this year, and 3.7 by 2030. It bounced off $185 and is a great entry point here.

Lithium is notoriously volatile and has been down because Wall Street has fallen out of love with EVs. But this remains a major growth area. Recently they reported a strong quarter and hugely raised their full-year forecast. He believes in lithium and EVs long term. Sell into strength and buy on weakness, like now.

They have lithium deposits in Chile and the US, so are sensitive to lithium price movements. That's why he sold last spring.

Lithium prices are adjusting; China prices in particular are contracting. 
Price was $33,400/ton last week, but futures for August are priced at $23,000. 
ALB in particular got downgraded today by Bank of America, with target price going from $262 to $195.  
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UBS predicts EV sales will rise 30-35% in China this year. If this trend holds true, then China’s demand should offset any weakness in lithium prices. Also, Albemarle’s PE of 11.24x now has risen from 9.4x to start the year, but is historically reasonable considering the media average over five years is 30.85x. Read: PDAC special: minerals for our full analysis.

Just bought it. They own some of the cheapest lithium in the world. They're restructuring their contracts this year, which should boost prices by 25%. It's a long-term global story because EV sales continue to grow. ALB is increasing capacity over the next 8 years.