Nova Chemicals Corp. (NCX.TO) Buy, Sell or Hold

Nova Chemicals Corp. (NCX.TO)

0.00

-0.00 (0.00%)

5 watching

WATCH

Have looked at this one when it’s been down. Their input is natural gas and if gas prices continue to stay weak, they should be able to come to grips with their costs. He is watching this one but it's a little too early to buy yet.

DON'T BUY

The chemical companies are getting squeezed between rising raw material costs and lower margins because of a difficulty in raising their prices to their end users.

HOLD

Has a model price of $51. Under a little bit of pressure at this time. They've been shaving the earnings estimates which is why it's been going down. Thinks it's close to a pop here.

HOLD

Came off a lot in the spring because of higher gas prices. There were a couple of big storms in Alberta that knocked off a couple of their plants which will make its numbers looked bad this year.

BUY

He has a model price of $51.68. A 32% differential.b

DON'T BUY

Natural gas is the feedstock so there is a lot of worry that they cannot pass this on to their customers quick enough. Looking at natural gas prices, this stock does not look good in the early part of 2006. Wait for a couple of quarters.

BUY

Probably OK at this price. Really very sensitive to the price of industrial chemicals. Because of the price of natural gas, they are subject to being squeezed on the margins.

DON'T BUY

Doesn’t look very good.

TOP PICK

Right now, ethylene margins are really getting strong. Where they were $0.16 a pound, they are now approaching $0.20. Could be earning $6.50 by next year. 2006/2007 are said to be the cyclically strong years for this company.

BUY

Chemicals are a cyclical business. Probably offers a pretty good entry point at this price.

HOLD

Prices for the products of chemical companies went through the roof last fall and winter. Supply caught up with demand and pricing settled back. Natural gas prices right now are at record levels chiefly because of shut down of production in the Gulf of Mexico.

DON'T BUY

Looks fairly expensive on the earnings they are generating today but a little more reasonable if we look at the longer term earnings expectations. A very volatile company and chemical pricing in particular is very volatile. Prefers other commodity sectors, such as metals.

BUY

Had a selloff early this year and broke below the 200 day moving average. You know that the stock sold off because of some negative event, so wait for the day of the announcementwhich is usually the time the stock is going to start to make some kind of return. As long as it holds the roughly $37 area, it would be a good time to step in.

DON'T BUY

Got out of this one when it broke through the 50 day moving average at around $57/58. It is now trying to make a base around $37/39 and believes that the same 50 day moving average that created the sell will be exceeded on the upside at which time it might be ready for a trade.

BUY

Feels the chemical stocks have been the overlooked cyclical's material play. The price of all of them is going up. Have the advantage of Alberta's cheap gas. Good price.

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Nova Chemicals Corp. (NCX.TO)