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Chemicals – Major Diversified

A. Schulman, Inc. (Nasdaq: SHLM) – FYE 08/2017 – Sell – The current market price is too high basis the current P/E, growth potential and balance sheet metrics – SEE RESEARCH NOTES

Aceto Corporation (Nasdaq: ACET) – FYE 06/2017

Air Products and Chemicals, Inc.
When y-o-y earnings increase by 213%, y-o-y debt falls by 24%, y-o-y free cash flow grows by 12%, the TTM PE is 11, and the current PE is 12, stockholders and wannabes should be happy, right? Maybe. What puzzles me, and this where due diligence comes into play, is why the company’s backlog of sales orders fell y-o-y by 55%. Couple this with y-o-y receivables decline of 6% and that the company has outstanding taxes of $877 million when it sits on $3.7 billion in cash and it just makes me wonder what managment is thinking. Is there some cash crunch coming? Is competition ramping up? Is there a take over play forming? In the end it may all be me just thinking out loud. But since this one is gonna require some cash to add to a portfolio, why not think out load?

Air Products and Chemicals, Inc. (NYSE: APD) – FYE 09/2017 – UNDER VALUED – The stock is currently trading at levels below my $333 fair value estimate – Please See Linked Worksheet

Ashland Global Holdings, Inc.
Okay I admit it, I have never really been an Ashland fan and now that they have spun off Valvoline, it just reminds me why I am not a fan. In a nutshell it comes down to management. I just don’t believe, and this is very subjective I know, that current management is up to the task of managing the company. I understand that FY 2017 results were skewed somewhat because of the Valvoline spin off. But even allowing for that, I just don’t believe management “gets it”. Now that Valvoline is no more, and the company’s financial performance is laid bare, it is going to be interesting to see how the company fares in the global marketplace. Personally I think it is going to falter, leaving many investors wondering why they still own this stock?

Ashland Global Holdings, Inc. (NYSE: ASH) – FYE 09/2017 – OVER VALUED – The stock is currently trading at levels above my $3 fair value estimate – Please See Linked Worksheet

Celanese Corporation
I went back in time with Celanese and learned that the investment return for a five year hold for the company (2013-2017) was 143%, with the largest portion of that return, 38%, coming during FY2017. That’s the thing I am having trouble grasping. A 38% ROI, in a year when sales grew 14%, yet earnings were down 1%. A 38% ROI in a year when free cash flow grew by 1%, but debt grew by 21%. Maybe I’m not seeing the big picture here. Maybe the 70/30 cellulose derivatives joint venture with The Blackstone Group will somehow improve earnings. Or maybe purchasing the nylon compounding business from Nilit Plastics is going to help the company’s future fortunes, I just don’t know. What I do know is that last year’s purchase of thermoplastic compounder SO.F.TER. S.r.l. didn’t seem to help, nor have the plant closings in Belgium, Spain, or Illinois. Yet the price of the stock continues to climb. Over the years I have learned never to be amazed at the world of investing. PT Barnum’s banker said it best when he said “there’s a sucker born every minute”, which how I would view buying this stock at current prices.

Celanese Corporation (NYSE: CE) – FYE 12/2017 – OVER VALUED – The stock is currently trading at levels above my most recent fair value estimate – Please See Linked Worksheet

E.I. DuPont de Nemours and Company (NYSE: CE) – FYE 12/2016

FMC Corporation (NYSE: FMC) – FYE 12/2016

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.