This under-the-radar company OLN is the best performer in my portfolios of late. Expecting more upside, possibly to $30 over the next two years. And you get a divvy to boot!
Olin Corporation manufactures and sells chlor alkali products in the United States and internationally. The company operates through three segments: Chlor Alkali Products, Chemical Distribution, and Winchester. The Chlor Alkali Products segment provides chlorine/caustic soda that is used in pulp and paper processing, chemical manufacturing, and water purification, as well as in the manufacture of vinyl chloride, bleach, swimming pool chemicals, and urethane chemicals; sodium hypochlorite for use in household cleaners, laundry bleaching, swimming pool sanitizers, semiconductors, water treatment, textile, pulp and paper, and food processing; and hydrogen used in fuel source, hydrogen peroxide, and hydrochloric acid. This segment also offers hydrochloric acid for steel, oil and gas, plastics, organic chemical synthesis, water and wastewater treatment, brine treatment, artificial sweeteners, pharmaceuticals, food processing, and ore and mineral processing; and potassium hydroxide that is used in fertilizer manufacturing, soaps, detergents and cleaners, battery manufacturing, food processing chemicals, and deicers. The Chemical Distribution segment manufactures and distributes bleach products; and distributes caustic soda, potassium hydroxide, and hydrochloric acid. The Winchester segment provides gauges and calibers of shotgun shells, rimfire and centerfire ammunition for pistols and rifles, reloading components, and industrial cartridges; small caliber military ammunition for use in infantry and mounted weapons; and industrial products that are used in maintenance applications in power and concrete industries, and powder-actuated tools in construction industry. The company markets its products through its sales force and directly to various industrial customers, mass merchants, retailers, wholesalers, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was founded in 1892 and is headquartered in Clayton, Misso
Add back the acquisition related costs and you get to roughly .16 per share. That is light vs. consensus but hardly disastrous. Forward guidance is about what they have been saying for the last 3 or 4 months. Capex and acquisition spending are a touch higher than previous guidance, but broadly in line. I don't really see a convincing reason for the sell-off, personally. OLN has a couple years to deliver on the acquisition synergies and results and it will probably take that long. In the meantime, the dividend is not at risk and they should generate sufficient EBITDA to cover their capex, pay interest, pay the dividend, and pay down some debt.
Yup in my ppinion its dirt cheap under 20. Fine company even better with the dow purchase. Excellent dividend. JMHO
Sentiment: Strong Buy
As part of the dow deal, olin pays over $400M in order to be considered co-investor (pricing wise) in the dow
ethylene cracking business. that is the cash machine of dow and lyondell.
The lower the price of Ethane, the lower the raw material for Olin. Ethylene goes into Olin's pvc and
chlorinated solvents. needless to say over time the ethylene cost should translate to a lot more than $400M
Just thought people need to realize that.
For 2016 they are projecting $404 million of free cash flow / 166 million fully diluted shares = $2.50 per share. This is a screaming buy
If I'm reading the report correctly, they lost (0.37) against avg expectations of 0.20! That's a miss of (0.57) in my book. Another kick in the butt for shareholders while DOW is partying like it's 1999! #$%$!
I was expecting earnings after the close..................that was an hour ago.................DOW posted great earnings..............what about OLN.......................are we screwed? Seems that all my stocks are down including OLN..................so, at this point, call me a pessimist...............I'm expecting bad news! If the news is good, then I still expect OLN to tank..............that's the way it's been lately!
Don't expect DOW to buy out OLN. That would amount to buying back the chlor-alkali business which DOW sold to OLN. DOW no longer wanted to be in that product line.
DOW owns 51% of OLN because DOW took payment in OLN stock.
If anything, you should expect that DOW will sell off their stake in OLN at some future point in time. Just hope that DOW does not do so by placing a market order to SELL in one big chunk.