Good News & Bad News, page-37812

Your data is, well, dated. I’m guessing that you were looking at ALB’s last annual. Their management is pretty poor, and numbers are falling quickly.

As of their last quarterly (Q3, ending 30 September 2023), current total debt is U$3.66B and net debt is U$2.06B. Both numbers have increased over the past two quarterlies, in spite of profits.

Furthermore, their quarterly EPS for Q1 of 2023 was $10+, but it fell to U$5+ for Q2, U$2+ for Q3, and the average estimate of 18 analysts for Q4 is now U$1.09 for Q4 (even lower than when I wrote about this two days ago on another thread). Earnings are dropping, like the rest of the industry, to the point that it is NOT going to “easily” cover interest payments, and near term future earnings are questionable.

When looking at ALB’s profits, keep in mind that what you see reported on most trading and financial websites is the trailing twelve months (TTM). ALB is less than a month from reporting, and when they do, Q4 of 2022, when profit was closer to U$10 than U$9, will be replaced with Q4 2023, estimated to be U$1.09, meaning the reported TTM EPS will drop by approximately 33% and ALB’s SP is likely to drop significantly in the weeks after reporting.

On top of everything, you can’t dismiss the giant sword hanging over their heads. The only profitable Lithium investments ALB have, right now, are Greenbushes and their Chilean brine operations, and they are in the same boat as SQM. At any moment, we could be getting the announcement that environmental and indigenous protesters are shutting the road to ALB’s brine salar, just as recently happened to SQM.

The sky is not falling on ALB, yet, and they’re hardly going bankrupt. It is, however, fair to say that they have made far more poor decisions, often with significant impacts to shareholder value, than good decisions. Just utilizing the LTR investment as an example, they were completely outmaneuvered by GR and CE, dilly dalied on making a decision, and have now been forced by balance sheet “issues” to sell their LTR holdings at a loss in the U$100M range, and that’s just one example of poor performance.

We’ll see what the quarterly says about recent PLS operations, but I’m willing to wager that PLS management will rate higher than ALB’s.

Have a nice weekend