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Has owned this for five years. Great growth, bigger and more diversified than ever. But the last three quarters underperformed. They bought Innovia in 2016 and have struggled to integrate it. But their major input cost is resin, so the current decline in oil prices will reduce costs and raise earnings. A lot of their products go into consumer packaged goods, which are not cyclical and won't get hit in a downturn.
(A Top Pick Nov 30/17, Up 12%) There are $500 million of synergies up for grabs after the big merger, which could even be higher. They are ahead of plan in synergizing. Also are selling $5 billion of non-core assets. This week in Chile, they just sold a lithium mine, generating $4 billion in cash that'll go to share buybacks and dividends. There are big gains still to come.
(A Top Pick Nov 30/17, Down 14%) Midstream energy has been challenging. IPL runs several businesses: nat. gas extraction which as recovered after depressed margins last year; cash flows coming from oil pipelines; storage which has struggled. When this backwardation clears, the margins should come back. Then there's a $3.5 billion propane dehydrogenation plant that'll be a great asset, that will crank out $600 million in operating profit yearly starting in late-2021. Until then, you'll pocket the dividend above 7%.
