Chicken Feed Additive Becomes Growth Product for Fracking: A Wall Street Transcript Interview with Daniel Rizzo, an Analyst with Sidoti & Company, LLC

Wall Street Transcript

67 WALL STREET, New York - July 29, 2014 - The Wall Street Transcript has just published its Agriculture & Specialty Chemicals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Chemicals Companies Pricing Power - Emerging Market Demand - Specialty Chemicals and Fertilizer Pricing Power - Raw Material Costs - Potash, Nitrogen and Phosphate Markets

Companies include: Balchem Corp. (BCPC), American Vanguard Corp. (AVD) and many others.

In the following excerpt from the Agriculture & Specialty Chemicals Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Where are you pointing investors now? What are some of your favorite stories right now?

Mr. Rizzo: Well, I like a company called Balchem (BCPC). I think that's a very strong story. It's probably a good growth name. In terms of value names, I still like American Vanguard (AVD). Although it has underperformed, I think the long-term outlook is very strong. American Vanguard does have some short-term headwinds.

TWST: Why does Balchem stick out for you right now?

Mr. Rizzo: Well, they make a product called Choline, which is used in natural gas fracking. Natural gas rig counts have been declining for a number of years, but the company has still been able to grow because they're inheriting market share.

They just did a major acquisition of a company called SensoryEffects, which is private, which increased their position in the food business, with colorings and flavors. It should be a very accretive acquisition, and I think it should significantly enhance growth. I would also say that Balchem's management team is probably one of my best.

TWST: So they are tied to fracking, but also to other areas?

Mr. Rizzo: They are unique company. One of the things I like about them is they're always finding different ways to sell their products, or just to grow. Their product choline is traditionally a nutritional supplement for poultry, but the company found a few years ago that choline can also be used as an additive that's used in natural gas fracking as a clay stabilizer. That's really provided a boost to earnings over the past few years. And now this acquisition is another means of growing.

TWST: American Vanguard took a big hit in 2013. What's happened there over the last year or so? Why do you still like in them over the long term?

Mr. Rizzo: I like the valuation, and I like the way they have...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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