ALB - Embedded Expectations Analysis - 2018 08 28
Albemarle Corporation (ALB:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 20.6x Uniform P/E, implying muted expectations for the firm. Meanwhile, management is confident in their growth strategy and demand across segments, as well as their volume outlookSpecifically, management is confident that their production volume will rise through Q4, specifically in lithium from La Negra. Additionally, they are confident in their strategy to only pursue acquisitions if it will provide them with a better return than internal growth opportunities, as well as their ability to offset any increases in fuel efficiency or EV trends with their progression in other technologies. Moreover, they are confident that the customer demands for lithium and flame retardant, specifically within electronics and construction segments will remain high. Finally, they are confident that both their employees and their partnered unions have strong leadership
Albemarle is a global developer, manufacturer and marketer of chemicals across a range of end markets including energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, crop protection and custom chemistry services. The company's segments include: Lithium, which develops and manufactures a range of basic lithium compounds and lithium specialties and reagents; Bromine Specialties, which includes products used in fire safety solutions and other chemicals applications; and Catalysts, which includes Clean Fuels Technologies, fluidized catalytic cracking catalysts and additives, and performance catalyst solutions.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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