LyondellBasell Industries (LYB)

Basically a manufacturer, designer and technology company around plastics and polymers. They also have a refining division. Valuation is really cheap. The company did quite well, particularly when there was a disparity between oil and gas. Trading at about 7X forward earnings. He anticipates earnings to be on a declining scale in 2016, but likely to stabilize in 2017. Dividend yield of 4.52%.

A good, long term holding. Nice dividend yield. You are not going to see a huge amount of growth coming from them, but a nice, safe, stable, high quality company with consistent earnings growth.

(Market Call Minute) It does well with improving chemicals prices and low natural gas prices. He is taking a look at it.

(A Top Pick June 16/14. Up 7.08%.) This is a pretty good free cash flow story, but within a very cyclical industry. It was doing really, really well until the oil price meltdown. Sold his holdings, but he would call it a Hold, and if oil got back into the $80s it would probably be a buy again.

(A Top Pick March 24/14. Up 5.6%.) One of the biggest petrochemical producers in the world and they have an advantaged position in North America playing the cheap natural gas prices to produce polyethylene. That advantage narrowed when oil prices dropped because other producers use oil. Still a great company and fairly valued here. Until oil migrates to higher levels, the level of profitability is a big constrained. If you are a long-term investor, you can continue to hold as it pays a nice dividend.

As energy prices came out through the fall, the halo effect washed its way into a lot of industries, and some of the chemical companies got impacted. Also, there is a question about global demand which has an impact as well. The chemicals group as a whole is still behaving okay, but he would prefer Ashland Inc (ASH-N) which looks a little more interesting. On Lyondellbasell, you want to wait and see what happens with petroleum prices

This is kind of an enigma. You would think it would do extremely well in a lower oil based commodity market because it is one of the largest producers of polyethylene and ethylene is a by-product of petroleum oil, so input costs would drop dramatically. However, the stock has dropped dramatically, but European prices have dropped even more. Currently the European producers of ethylene are producing at a much lower cost. This is a tough one to call and not something he would want to get involved in.

(Top Pick Nov. 12/13, Up 4.85%) The chemicals pulled back through this fall and he got out. Thinks natural gas prices will stay low.

Stock has fallen precipitously. US producers have lost their competitive advantage to Europeans, because ethylene prices have fallen much faster in Europe than in the US. This has created a disadvantage to American producers. However, that can be built back very quickly. These things are very fluid and it depends on the movement and relationship between WTI and Brent, the crack spreads, etc. There is an opportunity here, but remember that it is all based on what your view is on energy prices.

(A Top Pick Dec 6/13. Up 0.28%.) Stock is trading at a double-digit free cash flow yield and paying almost a 4% dividend. Biggest part of their business is chemicals, so your feed stocks for that business is ethane. Their biggest business is in the US so they can take advantage of the cheap ethane in North America. Have competitors internationally that produce those same products, but from naptha, an oil derivative, so the worry the market is having is that their competitors are going to become more cost competitive. The reality is that oil has to come down to about $25 a barrel to be cost competitive. This retreat is way overdone and he thinks it will start to go back up.

Chemical companies benefit from low natural gas prices. It makes North American produces very competitive. However, the headwind right now is a very strong US$, which is tough on commodity prices. There is concern that pricing will not hold up for some of these chemical companies. This one is a great cash flow generator. However, it is very close to breaking down and he would like to see it firm up. Also, in the most recent rally, it has rallied less than the market.

The market is punishing this one too severely at this point. He would say management has always been committed to delivering shareholder value so this is one of those opportunities to pick up a quality management team at a reasonable price.

(A Top Pick Dec 6/13. Up 51.29%.) Domiciled in Europe and a global leader in the petro chemical business. Great, great exposure to a super period for petro-chemicals, especially those companies with North American production. This is probably one of the best positioned companies with a percentage of production coming out of North America, where they benefit from the natural gas bubble we have here. A cheap stock and generates a lot of free cash flow. Still a Buy.

A global petrochemicals company. Very, very inexpensive. Cash flow and profits are rising. Good balance sheet. Buying back stock. Poised to benefit from the continuing glut of natural gas.

Great example of what he looks for. Good getting better. In the chemicals business in the US and have been doing very well. The big win for the chemical industry in the US right now is that one of the biggest feedstock costs is natural gas. There is lots of natural gas in the US. Now the next leg is coming because Europe is getting a little bit better and business in Europe is improving. This company spins out a ton of cash. We will likely see low natural gas prices for some time to come.