Opinions
Robert Lauzon
Dow Inc. (Formerly Dow Chemical) (DOW-N)
DOW-N
BUY ON WEAKNESS
Nov 29, 2019
Dow is the chemical side, which is very cyclical. Worries of a recession in Germany and the Chinese trade drove stock prices down in August, but has since recovered nicely. A good buy on weakness. Not one of his core holdings.
N/A
Stock price when the opinion was issued
chemicals
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BUY ON WEAKNESS
We'll be in a trading range in the short term at least. The Fed is so behind the inflation curve; inflation so high. Can the Fed engineer a soft landing? Even 7 rate hikes won't cure inflation. We need to fix supply chains. On the positive side, she always felt 2022 growth will be slower than 2021, because fiscal supports have ended. Housing is still strong. Banks are lending, and consumers have historically high amounts of cash to spend. She is adding during this weakness to Dow Chemicals and American Express for example. Look for solid fundamdentals.
chemicals
DON'T BUY
Chemical companies are industrials, and industrials do poorly during recessions. Shipments are down 14%, so earnings will struggle. 7x earnings. Dividend hasn't grown in last 5 years, so higher inflation wipes out your income. Yield is unattractive at 5.6%, which is only high because stock price has come down. Instead, he owns DHR and TMO.
chemicals
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