Are Smart Investors Making the Right Decision? Livent Corporation (LTHM)

Livent Corporation (NYSE: LTHM) stock jumped 1.11% on Tuesday to $25.55 against a previous-day closing price of $25.27. With 2.64 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.67 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $25.61 whereas the lowest price it dropped to was $24.75. The 52-week range on LTHM shows that it touched its highest point at $36.38 and its lowest point at $18.26 during that stretch. It currently has a 1-year price target of $32.39. Beta for the stock currently stands at 1.77.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LTHM was up-trending over the past week, with a rise of 6.15%, but this was up by 22.25% over a month. Three-month performance dropped to -16.01% while six-month performance rose 10.94%. The stock gained 16.61% in the past year, while it has gained 28.59% so far this year. A look at the trailing 12-month EPS for LTHM yields 0.98 with Next year EPS estimates of 1.85. For the next quarter, that number is 0.37. This implies an EPS growth rate of 102.90% for this year and 32.69% for next year. EPS is expected to grow by 1.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -60.30%.

Float and Shares Shorts:

At present, 179.30 million LTHM shares are outstanding with a float of 178.16 million shares on hand for trading. On Oct 13, 2022, short shares totaled 24.29 million, which was 13.55% higher than short shares on Sep 14, 2022. In addition to Mr. Paul W. Graves as the firm’s Pres, CEO & Director, Mr. Gilberto Antoniazzi serves as its VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 91.30% of LTHM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 69.52% of LTHM, in contrast to 59.55% held by mutual funds. Shares owned by individuals account for 37.44%. As the largest shareholder in LTHM with 14.41% of the stake, BlackRock Fund Advisors holds 25,846,199 shares worth 25,846,199. A second-largest stockholder of LTHM, The Vanguard Group, Inc., holds 19,224,210 shares, controlling over 10.72% of the firm’s shares. Wellington Management Co. LLP is the third largest shareholder in LTHM, holding 9,190,779 shares or 5.12% stake. With a 7.39% stake in LTHM, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 13,247,768 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.03% of LTHM stock, is the second-largest Mutual Fund holder. It holds 5,439,749 shares valued at 108.09 million. Vanguard Small Cap Index Fund holds 2.58% of the stake in LTHM, owning 4,621,796 shares worth 91.84 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LTHM since 21 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LTHM analysts setting a high price target of $45.00 and a low target of $22.00, the average target price over the next 12 months is $32.25. Based on these targets, LTHM could surge 76.13% to reach the target high and fall by -13.89% to reach the target low. Reaching the average price target will result in a growth of 26.22% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LTHM will report FY 2022 earnings on 02/14/2024. Analysts have provided yearly estimates in a range of $1.80 being high and $1.30 being low. For LTHM, this leads to a yearly average estimate of $1.40. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Livent Corporation surprised analysts by $0.01 when it reported $0.41 EPS against a consensus estimate of $0.40. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is $0.45 and the low estimate is $0.33. The average estimate for the next quarter is thus $0.38.

Summary of Insider Activity:

Insiders traded LTHM stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 15 while that of sell transactions has risen to 6 over the past year. The total number of shares bought during that period was 190,811 while 118,713 shares were sold.

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