SUP - Superior Industries: EV Exposure And Resilience To Chip Shortage Point To More Upside

• Superior Industries ("Superior") is an aluminum wheels manufacturer whose stock staged a spectacular recovery at the end of 2020.
• The company has been relatively immune to the chip shortage affecting the automotive industry, as car manufacturers prioritize high-end vehicles that typically use more of Superior's products.
• Electric vehicle adoption and environmental restrictions are expected to drive the demand for lighter materials such as aluminum, and Superior stands to benefit.
• The easy money has been made but there is still plenty of upside potential as Superior pays down its debt, leading to a rerating of the equity.
• Risks remain high given that Superior is a heavily leveraged company, with negative equity at the moment.

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