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We recommend selling Worley Limited (WOR) and switching to Ampol Limited (ALD). Our initial retention of WOR was based on the expectation of a rebound from its recent lows, which has not materialized.
After our timely trim less than a month ago, Lithium stocks have fallen heavily due to EOFY Tax loss selling.
Our relative value model now suggests that Liontown presents more long term value
the combination of oversupply, moderated demand growth, geopolitical instability, and environmental challenges has contributed to the downward trend in lithium stocks.
Incorporating a 3% allocation to Arcadium Lithium (LTM) within our balanced portfolio represents a prudent investment strategy, given the stock’s attractive valuation relative to its sector peers. This investment opportunity is underscored by LTM’s competitive market positioning and the current undervaluation, suggesting a favorable entry point. Additionally, the stabilization of lithium prices, alongside emerging signs of recovery in the commodity market, indicates a positive outlook for lithium demand. This is particularly relevant in light of the growing electric vehicle and renewable energy markets.
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