LyondellBasell Industries (LYB)

Global petrochemical company. Primarily in base petrochemical materials like polyethylene. A really good play on energy in North America. There is a glut of natural gas in North America and we are trying to find ways for it to get out. One of the bigger beneficiaries is households getting cheaper gas prices. But petrochemical companies use natural gas to produce chemicals and this is probably one of the best plays on that. Very cheap. Trading at under 10X 2015 earnings. 8% free cash flow yield. 2.7% dividend yield.

Chemicals industry serving auto and housing. Biggest input cost is Nat Cost. Will probably build additional capacity in North America. Pay dividends and buy back shares. Would continue to add.

(A Top Pick Jan 7/13. Up 35.33%.) The chemical sector has been a big beneficiary of all the oil/gas production in the US. One of the biggest feedstock costs for a chemical company is natural gas and this company has really benefited from the low prices.

Benefits from the big energy boom in the US in energy. Biggest input cost is Nat Gas. Big cost advantage against global competitors. As business improves for industrials in the US, they will grow their earnings 25% for the next three years. Yield over 3%.

European company and a large part of their business is in North America. One of the leading global petrochemical companies. 3-4 years ago, had an over levered balance sheet, but they have de-levered it. One of the best exposures to petrochemical in North America and are benefiting from the low gas and ethane prices. Spinning off gobs of free cash flow. Trades at 10X next years earnings. 3.2% dividend yield.

(Market Call Minute) A play on high energy prices and demand on chemicals from China. Great cash flow.

One of the biggest plastics and chemical companies globally. One of the biggest input costs is natural gas. If you are getting your gas at $3 and the competition has to pay $9, it gives you a great opportunity. There is growth and demand for plastics. You have a housing market that is coming around. They could pay another special dividend this year.