Stock price when the opinion was issued
A top pick last November, because it's one of the leaders in industrial chemicals in North America. There's a lot going on behind the scenes here. He didn't see the downturn in this sector as well as intense competition. Likely, shares won't recover until the economy picks up, but an opportunity now.
Everybody loves the dividend here. Made a really bad acquisition 10 years ago, company was punished. Off that bottom, it's been pretty impressive. Q1 beat by 15%, raised guidance. Really good progress on capital allocation -- dividend raises, small tuck-ins, buybacks. Trades ~4.7 EBIT to EBITDA vs. its normal 6.3 mid-cycle valuation. Add on dips.
It has had some issues but is a much cleaner operating company now, although it's not getting credit for it from the market. It is a specialty chemical company with some good assets. Pays a 6 1/2% dividend and is doing an active share buyback of 5%. There is also growth since it is investing heavily in the water business, treating waste water and municipal water, which also provides stability. It is so cheap you can get a good return. Buy 5 Hold 2 Sell 0
(Analysts’ price target is $14.50)Likes it. New CEO, who's done a really good job restructuring. Provides environmental services. Provides chemicals to O&G, water treatment, and food industries. Reduced debt. A good part of the business is economically sensitive. Some investors are concerned about the income trust structure, but management says it's too hard to remove.
Used to own, going to do a deep dive on it.
Is okay to open a small position now, then especially if it breaks out to new highs above $12. The issue is that he expects a bigger correction in 6-8 weeks.