It’s hard to believe it has already been more than three months since I was introduced to InvestorPlace.com’s Best Stocks for 2017 contest. As I mentioned then, picking just one stock to outperform for the year ahead is a daunting task, but it was a challenge I was more than willing to take on! I’m very pleased to say that my top-down strategy, which puts a heavy focus on industry groups, pointed me in the right direction.
My pick for the best stock of the year is Albemarle Corporation (NYSE:ALB), a global specialty chemicals company that is a leader in lithium, bromine, refining catalysts and applied surface treatments. It’s one of three major global players in the lithium sector and owns lithium brine operations in Chile and the United States, as well as a stake in a mine in Australia.
How ALB Stock Has Been Faring
Albemarle has spent the first quarter hard at work expanding its lithium business to keep up with rising demand around the globe. In January, it amended an existing agreement with the Chilean Economic Development Agency to extend the terms out 27 years.
The agreement is expected to more than triple the lithium quota in Chile.
Then in March, ALB stock’s Talison joint venture in Australia approved an expansion of its lithium production at its Greenbushes mine, which will double the current output.
From a top-down view, chemical companies with exposure to lithium will continue to be the best-positioned in the current environment, and I like that Albemarle is at the forefront of the industry. Plus, a strengthening global economy will boost the chemical sector overall.
ALB stock has also kept up its solid earnings track record, reporting fourth-quarter numbers that beat the Street in February. Adjusted earnings of 78 cents a share were better than the expected 75 cents a share, and revenue of $696.7 million bested estimates of $646.4 million.