They had to sell manufacturing company stocks so they had cash to run GOOGL up to $700/share, a $50B increase in market cap for Google in one day. The cash to do that had to come from somewhere.
Because oil is down as well. It is thought that prices of finished products are indexed to oil and refiners get a percent (not fixed dollar value) as a ratio of oil price. Therefore, some people think that, as the price of oil falls, so do the potential earnings of oil and chemical companies.
Not necessarily true in the case of LYB. LYB is big into polypropylene and the upstream material propylene monomer. The price of these two products has been stable with the shale gas boom because nobody has commercialized a process to convert natural gas to propylene. Therefore, a bunch of plants (crackers) are making ethylene from natural gas when crackers used to use oil-based napha. When they used naphtha, they could get both propylene and ethylene. Now just ethylene when natural gas is the feed. Those making propylene, are making money. e.g. LYB
This stock has legs. Forget the fundimentals, trends, blah, blah, blah. The products they sell are the right ones for the future of plastics - cheaper is better and nothing is cheaper than polypropylene and polyethylene. The auto companies love it because of the price. The next step of the value chain (compounders) are getting better and better at making polypropylene strong, durable and what ever else is needed. Nissan made the first body panel out of polypropylene this year (Nissan Rouge). PP will demolish other "engineered" plastics (nylon, and other mid-value polymers) in the coming years.
Next story is that Basel was a JV between Shell and BASF and they made polymers but also developed catalysts for Polypropylene and polyethylene - the best catalysts. LYB now owns Basel and all technology. They use the technology for their own polymerization but they also LICENSE the catalyst technologies to their competitors. Win/Win.
Finally, LYB makes a range of solvents that will become adopted over the next years as they are green and likable, yadda, yadda, yadda. 70% of the business is polypropylene and polyethylene and additional fraction is the catalyst technology licensing so - in the end, the solvent bs is just bs and not going to move the price any. I'm in for the long haul - I see a $3.10/year dividend growing at 8 -12% per year and I see the share price growing with the dividend unless the other bozos buying this stock finally believe the P/E should be in the range of 16 - 20 instead of 12.
Raw materials and capital equipment are the big costs so some new plants will be required to keep the growth. Hopefully we will hear about some announcements soon to prove my theories are correct.
What's your sentiment? I am interested in this as a long. Like the idea of growth and yield. Analyst opinion all over the place on this one.
Should be trading according to P/E of 16 to 20 (in line with other growth companies offering similar trajectory). Unfortunately, it is priced to yield 3% on the $0.78 quarterly dividend.
Great ER plus great forward guidance, increase divi and continue stock buyback, end of refinery strike, new analyst comes in with a "buy" and in spite of all this, the stock seems to be stuck in the 100 to 104 range with lots of selling. The daily pattern remains spike in early trading followed by a fade in later trading. Did LYB go up too fast and now it's consolidating or am I missing something in the current action?
MNGA set to reach $2.50? That’s the question on the lips of investors after the company announces yet another order for its MagneGas®, a viable replacement for acetylene.