Please give me a compelling reason to continue owning this stock.
I have owned OLN for 6 years. I received the 3.5% to 4.0% dividend faithfully. In the interest environment we are in, that's a nice steady return. I suppose. But I've been watching other steady companies fly by with a higher and higher share price. And these aren't wild speculative plays: JCI, PPG, to name two. ( I own neither) Olin is in a commodity business (chlor alkali) and a discreet part manufacturing business (ammo). Both are really tough from an operational standpoint. You have to be flawless in execution, which I'm sure they are. But the risks can be daunting. So I ask, why should I continue owning this stock, when there are other nice options out there. Any thoughts are welcome, if there is a catalyst I'm missing, please, let me know. GTLA.
It is still a relative value compared to the rest of the market, at a little less than a 12 PE (market is over 16 PE). Dividend is steady. It's not that cyclical and it doesn't have a particularly high beta. It's the kind of steady stock you just leave in your portfolio and let its steady dividends compound.
If you are a football fan, a good analogy is that teams that focus on only the passing game, and not on running, defense, or special teams, can be exciting to watch but they rarely win championships or even playoff games. But if you've got a good defense and a good running game, you can usually make the playoffs even with mediocre passing. Olin is one of those boring stocks with a good defense and a good running game. It's not exciting. But low beta, dividend-paying stocks bought at the right times are how Warren Buffet got rich, and he's a Superbowl-winning investor by just about any measure.
After three days of almost pulling the trigger, I've decided to not sell just yet. First reason, is the rationale presented by Gordon; just set it and forget it. But I have two other reasons I'd like to share. DuPont just split their business by spinning off their coatings division. I'm pretty sure Olin is not going to do that,, but the threat that they might may help buoy the share price. Next, earnings will be released Monday, and someone made a nice bet buying a boatload of Dec 25 (Merry Christmas) calls. While I'd be shocked to see us at 25 then, I think we will be heading in that direction, rather than revisiting the teens.
Somewhere on this board, years ago, someone said to just trade OLN, while holding a core position. The "pivot point" is slowly rising, maybe that level is $21 now. Let it rise to 25-26, then sell, buy back at 21. Sell covered calls on your core position along the way. Hopefully all of those number increase over time.
A note to OLN management: I would summarize by saying that I somehow feel "good" by holding Olin, like I'm doing my civic duty to own a part of this solid American company. But also being American means you strive to do better, push hard and sometimes push back. Olin's business units are not easy businesses to run. Their management seems to have a pretty steady hand on the tiller. Thank you for that. I'm pretty sure you don't have Nerf guns and fresh espresso in the break room. But remember that you have to promote your business to the investment world. I know that four times a year everyone feels good about the "385th consecutive dividend" announcement. That's a great tradition of which we are all very proud. But a better announcement would be "386th consecutive increasing dividend". That would would boost the share price, even if you went from .20 to .205 to .207 to .21. Consider.
i'm in the same boat as you are. blackrock, vanguard and other big funds own oln for whatever reason. i guess if its good enough for them, and the dividend holds, then its good enough for me. i still buy the dips if it gets deep into the 21's to average in.