Lyondell Chemical Co.

LYO-N

(A Top Pick march 13/07. Up 55%.) Was acquired. Bought it because of their ethylene and their refining and marketing.

Prefaced his Top Picks stating, “It is not a cheap market”. Petrochemical as well as refining/marketing. Bought the Venezuelan government’s Houston refinery. Since then, refining and marketing margins have gone through the roof. Chemical business is doing better. The largest shareholder, Occidental Petroleum (OXY-N) just sold their shares. Still cheap and has lots of upside.

One of the biggest players in the ethylene market and one of the largest refiners of gasoline in the US. Recently bought out Venezuela's stake in the Houston refinery. Selling off some of their less strategic positions. Paying down debt. Good dividend.

Half a chemical company (mostly ethylene) and half a refining company. Bought out Venezuela's holdings in its Houston refinery at a very good price. Refinery margins have gone up dramatically since. Selling off another division and will be able to pay off all the debt on the Houston deal.

They have both ethylene and refinery/marketing business. Hurricane Katrina took out a couple of their plants at the same time that the price of oil went up dramatically. Oil has moderated and ethylene has picked up. Bought a Houston refinery and are making gobs of money from it.

The ethanol market basically crapped out. Basically a commodity play and are susceptible to the end user. Volatile.

(A Top Pick Aug 15/05. Down 4%.) Still likes. Has been volatile because raw materials of oil and natural gas have spiked up. Chemical companies have not been able to pass along price increases as fast. Also, one of their plants in Louisiana will be permanently shut down. There will be a shortage of ethylene for a number of years.

(A Top Pick Aug 15. Up 1.5%.) A major ethylene producer and believes there's going to be a shortage in the next few years. Unfortunately the price of oil and gas has been pushed up very fast because of the hurricane. Have not been able to pass their costs along as quickly. This is temporary and he still likes.

With the price of oil and gas going up as quickly as they are, they can't raise their prices to keep pace with it. There will be some temporary hurt. Could drop another $1 or $2. There is a shortage of ethylene which will go on for the next couple of years. Good yield. Cyclical.

(A Top Pick April 25/05. Down 3%.) Pays a great dividend. Very volatile because it's a feed stock company which is based on oil prices.

A diversified chemical company. Main product is ethylene which is forcast to be in short supply through 2008. With demand remaining strong there have been worries about a number of plants being built in the middle east, but they keep getting delayed. 3% yield. In a good growth phase. Cyclical.

Dividend of 3.2% which is one of the highest dividends in the chemicla group. They're big in ethylene, styrene, propolenes, etc. Well diversified in stable chemicals as well as specialty ones giving it less volatility. Chemical prices came off earlier in the year and ethylene is now starting to climb again and the stocks are starting to show that.

If you are looking at major chemicals, Dow Chemical (DOW-N) and Lyondell Chemical (LYO-N) would both be good. Lyondell is cheap, good dividend and has growth ahead of it. He is looking at Lyondell right now.

Did well and then came off like a lot of the commodity/chemical companies. On these cyclicals, it's the price of the commodities. In this case, the cycle is getting fairly extended.

Big in the polyethelene and polystyrene markets. Also have some specialty chemicals (high performance chemicals). Like all chemical companies they had a great run until March and then fell off. Longer term outlook is good. Cyclical.