After DOW just got out of the way of Olin in the chlorine business and eliminated the supply overhang concern, I think you can expect solid medium term growth out of both parts of Olin. Coke is having growth problems, IIRC, and is a little pricier on a PE basis. You'll probably be better off in the medium term with Olin.
Before the DOW announcement, I would have said Olin is just one of many decent, dependable dividend and value plays out there. Now, it's an obvious buy.
Sentiment: Strong Buy
I agree, and those opportunities should be paying down debt. Once their debt burden is substantially reduced, then the risks from IO volatility should be considerably lessened, and they can start working on diversifying into chromite again.
There doesn't appear to be a near term solution for the political problems holding up their chromite project, anyway.
I am well aware that PCP has paid the same dividend for some time. My point is a different one, which I think was clear enough in my earlier post.
Why should PCP maintain a dividend at all if it is a .05% yield? It would probably be better spent on funding organic growth (clearly the board's priority at PCP, and rightly so). Or it could slightly reduce their somewhat significant debt load.
A dividend this small just doesn't make sense at the current size of the company or its share price. It's not as if normal investors would ding them for dropping such a small dividend (at least, not much or for long), so there must be a reason other than shareholder friendliness to maintain it.
I gather you are suggesting inertia is the explanation. That seems unlikely to me. The Board has to look at the dividend every quarter, so there is at least a nominal consideration of the item before it is voted upon, and the dividend declared.
Not that I bought PCP for the dividend, but why does it even have one if it's that small? Is it to qualify them for some funds that require all their stocks to pay dividends or something?
Book value went up more than that that per share. You might want to note this gem about TWO's core earnings and book value from the CC: "All of these metrics are consistent with our expectations when we set the third quarter dividend."
Sometimes mREITs position themselves defensively for a quarter or two and reduce their leverage. TWO did just that, and their book value did not take the hit over the last two quarters that most mREITs did because of it. They will probably increase their leverage on their agency bonds and up their earnings in Q4, since there is a little more clarity on rates and tapering now. If there is an issue, TWO can just not buy back as much stock for a quarter or two if liquidity is an issue, but based on the CC, it is not.
If you are still concerned about owning OLN, the big EPS beat and growth in Winchester in Q3 should alleviate your concerns. Their cash doubled in Q3! It was down AH when I wrote this, which I think is crazy. If it's down tomorrow or trends down over the next few weeks for no reason, I'll be looking to add.
Sentiment: Strong Buy
Olin blows away EPS estimates of .66 with .86 EPS. Revenues miss slightly (which is apparently the theme of Wall Street this quarter). It was down about 2% AH, despite that huge EPS beat.
I had been contemplating selling out of OLN, as it hasn't done much, but I rethought it in response to checking the stats to answer another question on this board. After seeing this Q's EPS beat and the very nice growth in Winchester, I now think this is one of the bigger values I know of in the market. I will probably buy more soon, especially if it dips below 21.
Sentiment: Strong Buy
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.
I know this is a low liquidity stock, but I was surprised to see no movement on the announcement regarding the new licensees for Caribbean Joe. That seemed pro-growth to me.
Outside of relatively big wars, there isn't that much increase in steel use or procurement from conflicts these days. I would be surprised if you could even see it in the data for the Iraq War, where uparmored humvees used appreciable amounts of steel. Steel is used more for construction and transportation uses, and there might actually be some material changes that would result from the EU getting back to a more normal rate of car buying (which would add a few million more cars sold per year), or the Chinese infrastructure investment program announced a few months ago actually coming to fruition.
The Ring of Fire project for chromium/chromite is on hold. There were unresolved permitting/environmental/infrastructure issues. Given the somewhat perilous condition of Cliff's balance sheet, I was glad to see they postponed it. Maybe a more favorable set of officials will give it another look in a few years, if Cliffs is in a better state to pursue it. Or if they want it bad enough, maybe they'll finance the road instead of Cliffs doing so.
Very solid revenue increase (+330%!) Y/Y, though obviously with the licensing business model the old business is not exactly comparable. Forward guidance to $23-$25M seems about right, with half in Q4. The real question is what the EPS is going to look like in Q3 and Q4, after only $.04 in Q2 and the big GAAP losses in Q1 on the various charges to change to the licensing model.
I think SA meant to reference CF instead of CLF in that note, since CF makes fertilizers of various types (I own stock in both). Regardless, the market action today seems to have been about US Steel's weak results.
It is one of the drivers of their long term contracts with the Great Lakes steel mills like Essar, as I understand it. But that's well-priced in.
And added about 3 times that to their liquid cash position, so they don't have to go back to the credit line for operational cash if iron ore stays in range.
But if anyone understands what is driving $200 per ton costs at Wabush (or about $150 after adjustments), and why that isn't fixed yet, I'd love to hear the explanation.
Maybe that's why Brlas was seemingly shoved out the door when Carrabas announced his retirement...
Key positive takeaway outside of the headline earnings and revenue beat: "For the second quarter, Cliffs generated $414 million in cash from operations, versus generating $96 million in the 2012 comparable quarter." That is a pretty hefty increase in operational cash flow.
CLF directionally is highly correlated with iron ore spot prices. It also has a very high beta. So, even a big pop from a positive Q2 report could gradually be eroded by either lower iron ore price trends or a generally lower SP500 level.
The delay in Carraba staying on, e.g. until a new chairman and a new CEO are found, makes it unlikely he was pushed out. I've been hoping the Board would push him out, as I think he overshot with the Consolidated Thompson and other deals, and should be responsible for the mess they have made of CLF's balance sheet as a result. But it looks like his departure is basically voluntary.
Brlas's change, on the other hand, was "effective immediately," which is code for "the Board canned you." She was the president of operations. I think it's fair to say with the delays at Bloom and icing the Ring of Fire project that operations weren't exactly going well at CLF recently...