The United Kingdom has decided to refrain from an attack on Syria, although the United States may go it alone (or perhaps with France.) Obama has agreed to pass the decision to Congress which will debate the matter no earlier than September 9. And in Congress, Obama could lose his chance to punish Syria for its use of gas which killed over 1,400 people, altogether. �A limited military action, if approved, � could blunt the use of these chemical weapons. However, it could add to the violence and instability in the entire region. Whether or not Syria�� government is affected, its economy is bound to worsen, probably faster than the turmoil so far has caused already.
From the standpoint of these economic consequences, Syria�� gross domestic product (GDP) and imports and exports will have no effect on the economy in the rest of the world. It is too small.
On the basis of nominal GDP, Syria ranks 63rd among all countries, according to the International Monetary Fund (IMF). The nation�� GDP last year was a mere $74 billion, making it smaller on that basis than Ecuador and Morocco. The country�� population is just above 22 million. Syria has walled off access to its data, as far as the IMF is concerned, which means little can be determined about how badly it has been damaged recently. The IMF reported on August 2:
LyondellBasell Industries N.V. manufacturers and sells chemicals and polymers, refines crude oil, produces gasoline blending components, and develops and licenses technologies for production of polymers. The company?s Olefins and Polyolefins segment offers olefins, including ethylene, propylene, and butadiene; aromatics, such as benzene and toluene; polyolefins, which comprise polypropylene (PP), high-density polyethylene, low-density polyethylene, and linear low-density polyethylene; specialty polyolefins, including catalloy process resins, PP compounds, and polybutene-1 resins; and ethylene derivatives, which comprise ethanol. Its Intermediates and Derivatives segment provides propylene oxide (PO); PO co-products, including styrene monomers and TBA derivative isobutylene; PO derivatives, such as propylene glycol, propylene glycol ethers, and butanediol; acetyls, such as methanol, acetic acid, and vinyl acetate monomers; ethylene derivatives, which comprise ethylene oxide , ethylene glycol, and ethylene glycol ethers; and flavor and fragrance chemicals. The company?s Refining and Oxyfuels segment offers gasoline and components, ultra low sulfur diesel, jet fuel, and lube oils; diesel, feedstock, fuel oil, gasoline, and bitumen; and gasoline blending components, including methyl tertiary butyl ether, ethyl tertiary butyl ether, and alkylate. Its Technology segment develops and licenses polyolefin and other process technologies. This segment also develops, manufactures, and sells polyolefin catalysts, as well as provides technology services, which comprise safety reviews, training and start-up assistance, engineering services for process and product improvements, and manufacturing troubleshooting. LyondellBasell Industries N.V. has operations in the Americas, Europe, Asia, and internationally. The company was founded in 2005 and is based in Rotterdam, Netherlands. LyondellBasell Industries N.V. is a subsidiary of Prochemie GmbH.
Advisors' Opinion: - [By Tyler Crowe]
This cheap feedstock has sent production up over one-third in the past five years, and has given a nice pad to chemical company earnings. LyondellBassell (NYSE: LYB ) reported that 2012 was a record year in terms of earnings despite a 6% drop in revenue. These kinds of results have resulted in a mad rush to increase�capacity. The entire industry has plans to spend about $30 billion in new plants to take advantage of cheap feedstock. Dow personally is looking to invest $1.7 billion to build what would be the company's largest ethylene facility and would increase the company's ethylene capacity by 1.5 million tons per year. With so much invested in cheap natural gas, it should come as no surprise that the company will look to protect that position for as long as possible.�
10 Best Chemical Stocks To Own For 2014: Stepan Co (SCL)
Stepan Company, incorporated on February 19, 1959, produces specialty and intermediate chemicals, which are sold to other manufacturers and then made into a variety of end products. The Company serves principal markets, such as manufacturers of cleaning and washing compounds (including detergents, shampoos, fabric softeners, toothpastes and household cleaners), paints, cosmetics, food and beverages, agricultural products, plastics, furniture, automotive equipment, insulation and refrigeration. The Company has three segments: surfactants, polymers and specialty products. The Company operates in the geographical regions of North America, Europe, Latin America and Asia. As of December 31, 2012, the Surfactants segment accounted to 72%, Polymers segment accounted to 24% and Specialty segment accounted to 4% of the Company�� revenues. On March 22, 2012, the Company increased its controlling interest in Stepan Philippines Inc from 89% to 100%.
Surfactants
Surfactants are used in a variety of consumer and industrial cleaning compounds as well as in agricultural products, lubricating ingredients, biodiesel and other specialized applications. The Surfactants are principal ingredients in consumer and industrial cleaning products, such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos, body washes, toothpastes and fabric softeners. Surfactants are manufactured at six North American sites (five in the United States and one in Canada), three European sites (United Kingdom, France and Germany), and three Latin American sites (Mexico, Brazil and Colombia), and one Asian site (Philippines and Singapore). The Company also holds a 50% ownership interest in a joint venture, TIORCO, LLC (TIORCO), that markets chemical solutions for increasing the production of crude oil and natural gas from existing fields.
Polymers
Polymers generate its revenues primarily from the sale of polyols and phthalic anhydride used in plastics, buildi! ng materials and refrigeration systems. It includes two primary product lines: polyols and phthalic anhydride. Polyols are used in the manufacture of rigid laminate insulation board for thermal insulation in the construction industry. Polyols are also a base raw material for flexible foams, coatings, adhesives, sealants and elastomers.
Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, phthalic anhydride is used internally in the production of polyols. In the United States, polymer product lines are manufactured at the Company�� Millsdale, Illinois, site. In Europe, polyols are manufactured at the Company�� subsidiaries in Germany and Poland. In Asia, polyols are produced at the Company�� 80% owned joint venture in Nanjing, China.
Specialty Products
Specialty products are used in food, flavoring and pharmaceutical applications. It includes flavors, emulsifiers and solubilizers used in the food and pharmaceutical industries. Specialty products are primarily manufactured at the Company�� Maywood, New Jersey, site.
Advisors' Opinion: - [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Stepan (NYSE: SCL ) , whose recent revenue and earnings are plotted below.
- [By Monica Gerson]
Stepan Company (NYSE: SCL) is expected to report its Q3 earnings at $0.93 per share on revenue of $467.40 million.
Lennox International (NYSE: LII) is projected to report its Q3 earnings at $1.28 per share on revenue of $877.87 million.
- [By Marc Bastow]
Specialty chemical maker Stepan (SCL) raised its quarterly dividend 6% to 17 cents per share, payable on Dec. 13 to shareholders of record as of Nov. 29. This marks the 46th consecutive annual dividend increase.
SCL Dividend Yield: 1.13%
10 Best Chemical Stocks To Own For 2014: Syngenta AG (SYNN)
Syngenta AG is a Switzerland-based company engaged in production of products for crop productivity. The Company's businesses include herbicides, insecticides and fungicides for crop protection, field crops, vegetables and flower seeds, seed care products and turf, garden, home care and public health products. The Company diversifies its operations into four geographical segments (Europe, Africa and Middle East; North America; Latin America and Asia Pacific), which represent the integrated Crop Protection and Seeds business areas, as well as a separate global segment Lawn and Garden. The Crop Protection business is active in herbicides, insecticides and fungicides manufacture. The Seeds business produces and sells seeds for growing corn, soybeans, sunflower, and sugar beet, among others. The Lawn and Garden business offers a range of products for use in the flower genetics, ornamentals, consumer lawn and garden, and Turf and landscape markets.
Advisors' Opinion: 10 Best Chemical Stocks To Own For 2014: NewMarket Corp (NEU)
NewMarket Corporation (NewMarket), incorporated in 2004, is a holding company, which is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development). Each of the Company�� subsidiaries manages its own assets and liabilities. Afton encompasses the petroleum additives business, while Ethyl represents the sale and distribution of tetraethyl lead (TEL) in North America and certain petroleum additives manufacturing operations. NewMarket Development manages the property, which it owns in Richmond, Virginia. NewMarket Services provides administrative services to NewMarket, Afton, Ethyl, and NewMarket Development. NewMarket Services departmental expenses and other expenses are billed to NewMarket and each subsidiary pursuant to services agreements between the companies.
As a specialty chemicals company, Afton develops, manufactures, and blends formulated fuel and lubricant additive packages, and markets and sells these products globally. Afton is a lubricant and fuel additives companies globally. Lubricant and fuel additives are products for maintenance and reliable operation of all vehicles and machinery. Ethyl provides contract manufacturing services to Afton and to third parties and is one of the marketers of TEL in North America. NewMarket Development manages the property, which it owns on a site in Richmond, Virginia consisting of approximately 64 acres.
Petroleum Additives
Petroleum additives are used in lubricating oils and fuels to enhance their performance in machinery, vehicles, and other equipment. It manufactures chemical components, which are selected to perform specific functions and combine those chemicals with other components to form additive packages for use in specified end-user applications. The petroleum additives market is an international marketplace, with customers ranging from oil companies and refineries t! o original equipment manufacturers (OEMs) and other specialty chemical companies. Lubricant additives are ingredients for lubricating oils. Lubricant additives are used in a range of vehicle and industrial applications, including engine oils, transmission fluids, gear oils, hydraulic oils, turbine oils, and in other application where metal-to-metal moving parts are utilized. Lubricant additives are organic and synthetic chemical components, which enhance wear protection, prevent deposits, and protect against the hostile operating environment of an engine, transmission, axle, hydraulic pump, or industrial machine.
Lubricants are used in every piece of operating machinery from heavy industrial equipment to vehicles. Lubricants provide a layer of protection between moving mechanical parts. Lubricants serve the functions, such as friction reduction, heat removal and containment of contaminants.
The Company offers a range of lubricant additive products, each of which is composed of component chemicals specially selected to perform desired functions. It manufactures the chemical components and blends these components to create formulated additives packages. Purchasers of lubricant additives tend to be oil companies, distributors, refineries, and compounders/blenders. The engine oils market�� primary customers include consumers, service dealers, and OEMs. Afton offers products, which enhances the performance of mineral, part-synthetic, and fully-synthetic engine oils.
The driveline additives submarket is consisted of additives designed for products, such as transmission fluids, gear oils, and off-road fluids. Transmission fluids serve as the power transmission and heat transfer medium in the area of the transmission. Gear oil additives lubricate gears, bearings, clutches, and bands in the gear-box and are used in vehicles, off-highway, hydraulic, and marine equipment. Other products in this area include hydraulic transmission fluids, universal tractor fluids, power ste! ering flu! ids, shock absorber fluids, gear oils and lubricants for machinery. These additives are sold to oil companies and often sold to vehicle OEMs for new vehicles. End-products are also sold to service dealers for aftermarket servicing (service-fill), as well as retailers and distributors.
The industrial additives submarket is consisted of additives designed for products for industrial applications, such as hydraulic fluids, grease, industrial gear fluids, industrial specialty applications, and metalworking additives. This submarket also shares in the 30% of the market not covered by engine oils. These products must conform to industry specifications, OEM requirements and/or application and operating environment demands. Industrial additives are sold to oil companies, service dealers for after-market servicing, and distributors.
The types of fuel additives the Company offers include gasoline performance additives, which clean and maintain fuel delivery systems, including fuel injectors and intake valves, in gasoline engine; diesel fuel performance additives, which perform similar cleaning functions in diesel engines; cetane improvers, which increase the cetane number in diesel fuel by reducing the delay between injection and ignition; stabilizers, which reduce or eliminate oxidation in fuel; corrosion inhibitors, which minimize the corrosive effects of combustion by-products and prevent rust; lubricity additives, which restore lubricating properties lost in the refining process; cold flow improvers, which improve the pumping and flow of diesel in cold temperatures, and octane enhancers. It offers a range of fuel additives globally and sells its products to fuel marketers and refiners, as well as independent terminals and other fuel blenders.
Real Estate Development
The real estate development segment represents the operations of Foundry Park I, LLC (Foundry Park I). The Company is exploring various development opportunities for other portions of the proper! ty it own! s, as the demand warrants.
All Other
The All other category includes the continuing operations of the TEL business (primarily sales of TEL in North America), as well as contract manufacturing performed by Ethyl. Ethyl manufacturing facilities include its Houston, Texas and Sarnia, Ontario, Canada plants. The Houston plant is engaged in petroleum additives manufacturing and produces both lubricant additives and fuel additives. The Sarnia plant is engaged in petroleum additives manufacturing and produces fuel additives. The All other category financial results include a service fee charged by Ethyl for its production services to Afton. Its remaining manufacturing facilities are part of Afton and produce both lubricant additives and fuel additives.
The Company competes with Berkshire Hathaway Inc., ExxonMobil Chemical, Royal Dutch Shell plc, Chevron Oronite Company LLC, BASF AG, Chevron Oronite Company LLC, The Lubrizol Corporation, Innospec, Inc., Eurenco and EPC - U.K.
Advisors' Opinion: - [By John Udovich]
The biotech sector has been pretty exciting this year�with small cap biotech stocks Prana Biotechnology Limited (NASDAQ: PRAN) and TNI BioTech (OTCMKTS: TNIB) having recently produced noteworthy news for investors�while Acceleron Pharma, Inc (NASDAQ: XLRN), Ophthotech (NASDAQ: OPHT) and BIND Therapeutics (NASDAQ: BIND) have just�set term sheets for their upcoming IPOs. Just consider all of the following recent news:
Surge in Biotech IPOs. Unquote.com has noted�a surge in biotech IPOs this year as there have been�almost 30 biotech IPOs since January - marking a 13-year high and sparking some concerns about a bubble. More specifically and according to the National Venture Capital Association (NVCA), there was just one venture capital-backed biotech IPO in the US in the first quarter of this year, but this was followed by a massive increase of 20 in�the second quarter and a�further six since July. There has also been a small uptick in�venture capital-backed European biotech companies going public (four) with�a listing on the Nasdaq appearing to be the most popular or rather the safest option. � New IPO Term Sheets. This month, a couple of small cap biotech companies announced their terms for upcoming IPOs, including 1)�Acceleron Pharma, Inc, a clinical stage biotech developing protein therapeutics for cancer and rare diseases, plans to raise $65 million by offering 4.7 million shares at a price range of $13 to $15; 2) Ophthotech, a clinical-stage biotech developing therapeutics for eye diseases, plans to raise $100 million by offering 5.7 million shares at a price range of $16 to $19; and 3) BIND Therapeutics, a clinical-stage biotech developing a platform of targeted and programmable therapeutics, plans to raise $71 million by offering 4.7 million shares at a price range of $14 to $16. Biotechs Invest More on R&D. The 2013 BDO Biotech Briefing examined the most recent 10-K SEC filings of publicly traded companies listed on the Nasdaq Biotechnolog
10 Best Chemical Stocks To Own For 2014: Airgas Inc.(ARG)
Airgas, Inc., through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company offers various gases, including nitrogen, oxygen, argon, helium, and hydrogen; welding and fuel gases, such as acetylene, propylene, and propane; and carbon dioxide, nitrous oxide, ultra high purity grades, special application blends, and process chemicals. Its hardgoods products comprise welding consumables and equipment, safety products, and construction supplies, as well as maintenance, repair, and operating supplies. The company also engages in the rental of gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers, and welding and welding related equipment. In addition, the company manufactures and distributes liquid carbon dioxide, dry ice, nitrous oxide, ammonia, refrigerant gases, and atmospheric merchant gases. It serves repair and maintenance, industrial manufacturing, energy and infrastructure co nstruction, medical, petrochemical, food and beverage, retail and wholesale, analytical, utilities, and transportation industries. The company operates an integrated network of approximately 1100 locations, including branches, retail stores, packaged gas fill plants, specialty gas labs, production facilities, and distribution centers. Additionally, it provides retail solutions to retail customers, such as florists, grocers, restaurants and bars, tire and automotive service centers, and others. The company markets its products through multiple sales channels, including branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, e-business, and independent distributors. Airgas, Inc. was founded in 1982 and is based in Radnor, Pennsylvania.
Advisors' Opinion: - [By Ben Levisohn]
The one problem: Air Products & Chemicals valuation. “[Air Products & Chemicals] has generally been at a discount to [Praxair] in the last five years due to its mix and more volatile performance, but closed the gap last year on activist involvement and potential restructuring,” Yang and Amadeo note.�Air Products & Chemicals trades at 21 times 2015 earnings, in line with Airgas’s (ARG) P/E ratio of 21.5 but well above Praxair’s 18.5 times.
- [By Monica Gerson]
Airgas (NYSE: ARG) is expected to report its Q2 earnings at $1.22 per share on revenue of $1.28 billion.
The Boeing Company (NYSE: BA) is estimated to report its Q3 earnings at $1.55 per share on revenue of $21.68 billion.
10 Best Chemical Stocks To Own For 2014: K&S AG (KPLUY.PK)
K&S AG is a Germany-based holding company which is active in the chemical sector. The Company divides its activities into four main business segments. The Potash and Magnesium Products segment is engaged in the crude potash and magnesium salts extraction and in processing raw materials into products for industrial, pharmaceutical, cosmetics and food industries. The Nitrogen Fertilizers business segment distributes fertilizers for almost all agricultural crops, and products for home and garden, plant care and plant protection, specialty fertilizers for public green areas, tree nurseries, horticulture and various special crops are offered. The Salt segment offers food grade salt, industrial salt and salt for chemical use, as well as de-icing salt applied to ensure road safety. The Complementary Business segments include recycling activities and the disposal and reutilization of waste salt mines, granulation of CATASAN, logistics, and trading in different basic chemicals.
Advisors' Opinion: - [By Chris Damas]
Other players, such as K+S (KPLUY.PK), Israel Chemicals and APC, Belaruskali and Soquimich (SQM) maintained their world shares at Uralkali's expense.
10 Best Chemical Stocks To Own For 2014: Rockwood Holdings Inc (ROC)
Rockwood Holdings, Inc. (Rockwood), incorporated in September 19, 2000, is a developer, manufacturer and marketer of specialty chemicals and advanced materials used for industrial and commercial purposes. Rockwood is focused on surface treatment and lithium chemicals, advanced ceramics, titanium dioxide pigments, iron-oxide pigments, timber-treatment chemicals and clay-based additives. Its products consist primarily of inorganic chemicals and solutions and engineered materials. As of December 31, 2012, it manufactured its products in 80 facilities in more than twenty countries and sold its products and services to more than 60,000 customers. The Company operates in five segments: Lithium, Surface Treatment, Performance Additives, Titanium Dioxide Pigments, and Advanced Ceramics. In September 2012, its subsidiary, Chemetall GmbH, completed the formal legal split of its operations into two independent legal entities. In September 2013, Rockwood Holdings, Inc completed the sale of CeramTec, its advanced ceramics business to Cinven. In October 2013, Rockwood Holdings Inc announced that the specialty chemicals group ALTANA completed the acquisition of the rheology business of Rockwood Holdings, Inc.
Lithium
The Company�� Lithium segment operates under the Rockwood Lithium brand name and develops lithium chemicals for a range of industries and end markets. It develops and manufactures a broad range of basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties and reagents, including butyllithium and lithium aluminum hydride. The Company operates its lithium business along five business divisions: Lithium Salts, Special Salts, Butyllithium/Lithium Metal, Battery Products and Lithium Specialties.
The Company develops and manufactures basic lithium compounds, which serve a range of industries and applications, and potash. Its products include lithium carbonate, lithium hydroxide, lithium nitrate, lithium chloride ! and potash. The Company develops and manufactures products which include lithium phosphate, lithium bromide and lithium carbonate pharmaceutical grade. It develops and manufactures lithium products for electronic applications, mainly for the primary (disposable) and secondary (rechargeable) battery industries. It develop and manufacture lithium compounds and other products for life science applications, such as special reagents for the synthesis of drug intermediates as well as for the flavor and fragrances industry. The Company develops and manufactures a range of products based on special metal compounds derived from cesium, zirconium, titanium, barium and rubidium.
The Company competes with FMC Corporation, Sociedad Quimica y Minera de Chile S.A., Cabot Corporation, Sigma Aldrich Corporation.
Surface Treatment
The Company�� Surface Treatment segment operates under the Chemetall brand name and develops and manufactures metal surface treatment products and services for a range of industries and end markets. This segment supplies surface treatment products and solutions for metal processing industries. It develops and supplies products and solutions for the chemical pre-treatment of metals and other substrates, some of which are customized for individual customers and applications. The Company provides surface treatment products and solutions for automotive original equipment manufacturers (OEMs), including an entire range of products and services for use in the paint shop step of car-body and automotive component manufacture. It provides products and services used to facilitate the cold forming of tubes, wire drawing and cold extrusion of metal.
The Company competes with Henkel AG & Co. KGaA, Nihon Parkerizing Co., Ltd., PPG Industries, Inc. and Nippon Paint Co., Ltd.
Performance Additives
The Company�� Performance Additives segment consists of business lines which develop and manufacture a range of specialty chemicals us! ed indust! rial and consumer products and processes. The Company produces synthetic iron-oxide and other inorganic pigments in a range of yellow, red, orange, ultramarine blue, black, manganese violet or blended shades, and serves the construction, paints and coatings, plastics, and specialty application markets with powder, granular and liquid grades. The Company develops and manufactures principally iron-oxide pigments for manufacturers of construction products for use in the coloring of concrete products, including paving stones, bricks, concrete blocks, roofing tiles, stucco and mortar.
It also develops and manufactures color pigments for the paints, coatings, plastics, paper and rubber end-use markets including its brands Ferroxide, Trans-oxide, Solaplex, Solarox and Colourplex. It produces a wide variety of pigments that include synthetic iron-oxides, corrosion inhibitor pigments, complex inorganic color pigments and process natural pigments such as burnt umbers and siennas. Its iron-oxide pigments are also used in a variety of specialty applications such as toner for printers and copiers, security inks used to print bank notes, catalysts for styrene production and cosmetics.
The Company�� Timber Treatment Chemicals business line manufactures food protection products primarily in North America and Europe. Its Timber Treatment Chemicals business also manufactures inorganic chemicals such as nitrates and chlorides for various industrial applications including chemicals that are added to concrete as curing accelerants and corrosion inhibitors, chemicals that are used for odor control in water treatment, galvanizing fluxes, micronutrients, pesticides and catalysts used in the manufacture of textile resins. The Company also develops and manufacture inorganic metallic chemicals for certain specialty markets. Its Clay-based Additives business develops and manufactures a range of specialty rheology modifiers and additives.
The Company competes with Lanxess AG, Cathay Pigment! s Group, ! Interstar Materials Inc. and Shanghai Yipin Pigments Co., Ltd., Lonza Group Ltd, Osmose, Inc., BASF Group, Kurt Obermeier GmbH & Co. KG, Rutgers AG, Elementis plc, Laviosa Chimica Mineraria S.p.A., R.T. Vanderbilt Company, Inc., Amcol, and Feralco AB.
Titanium Dioxide Pigments
The Company�� Titanium Dioxide Pigments segment operates under the Sachtleben brand name. Titanium Dioxide Pigments consists of two business lines: Titanium Dioxide and Functional Additives. It produces specialty grade titanium dioxide (TiO2) serving a variety of customers in the synthetic fibers, plastics, paints, packaging inks, coatings, cosmetics, pharmaceuticals and paper industries. The Company also develops TiO2 pigments, which are mainly used in special applications such as selected coatings, paints, packaging inks, plastics and laminated paper production processes. Its Functional Additives business line is a global manufacturer of barium-based and zinc-based inorganic fine white pigments and additives.
The Company competes with Fuji Titanium Industry Co., Ltd, Kronos Worldwide, Inc, DuPont Titanium Technologies, Cristal Global, Tronox Incorporated, Huntsman LLC, Tayca Corporation, Ishihara Corporation and Evonik Degussa., Solvay S.A., Gruppo Chimico Dalton S.p.A., Sakai Chemical Industry Co., Ltd.
Advanced Ceramics
The Company�� Advanced Ceramics segment operates under the CeramTec brand name. The Company produces ceramic components for hip joint prostheses, such as ball heads and inserts and ceramic glove formers latex gloves. The Company develops and manufacture products used in cutting tools, other tools and tooling systems. The Company develops and manufactures ceramic components that are used in mechanical applications and systems. Its products in mechanical applications include cutting blades, drawing and forming tools, drawing cones and capstans, guide elements, precision parts, pre-forms and friction discs. It also produces products used for app! lications! in certain niche markets, such as electrical/thermal and ceramic metal connections, pre-forms for the casting process of piston engines, mainly for diesel engines, and wear and corrosion protection in industrial plants and armor components used in vehicle protection.
The Company competes with Kyocera Corporation, CoorsTek, Inc., The Morgan Crucible Company plc and 3M.
Advisors' Opinion: - [By Ben Levisohn]
Air Products & Chemicals’ (APD) gain is Rockwood Holdings’ (ROC) loss after Air Products hired away Rockwood’s CEO Seifi Ghasemi to run the chemical company.
- [By Nelson Nguyen]
Lessons Learned from "The Little Book that Builds Wealth" by Pat Dorsey
Economic moats can protect companies from competition, helping them earn more money for a long time, and therefore making them more valuable to an investor. Return on capital (ROC) is the best way to judge a company�� profitability. Mistaken Moats: 1) Great products (i.e. Krispy Kreme, Netscape), 2) strong market share (i.e. Chrysler�� minivan, IBM�� PCs, General Motors), 3) great execution (i.e. Kodak), and 4) great management (i.e. JetBlue). They do not create long-term competitive advantages. They are nice to have, but they��e not enough. The four sources of structural competitive advantage are 1) intangible assets (brands, patents, licenses, etc.), 2) customer switching costs (products or services that are hard to give up, like banks), 3) network economics (i.e. credit cards, Microsoft Windows and Office), and 4) cost advantages (stems from process, location, scale or access to a unique asset). If you found a company with one of these characteristics with solid ROC, you��e probably found a company with an economic moat. It�� easier to create a competitive advantage in some industries than it is in others. See page 118 for Moats by Sector. Measuring Return on Capital: Return on Assets (ROA) measures how much income a company generates per dollar of assets. Return on Equity (ROE) measures the efficiency with which a company uses shareholders��equity and is a great overall measure on returns on capital. (Note: A flaw in using ROE is a company can take on a lot of debt and boost ROE without becoming more profitable.) Return on Invested Capital (ROIC) combines the best in both worlds by measuring the return on all capital invested in the firm (both debt and equity). Bet on the horse, not the jockey. Management matters, but far less than moats. The Moat Process on page 145: Has the firm historically generated solid ROC?
- [By Pato Kehoe]
Quality video content has continuously increased in value over the past years, and this firm has a made a point of following the money trail by producing and broadcasting an ample amount of high quality products. From award winning shows like ��odern Family��or ��he Simpsons,��to its popular sports programming, Twenty-First Century Fox has constantly satisfied the market's thirst for entertainment. The News Corp (NWSA) spin-off, for one, was a highly beneficial strategy for this company, setting it apart as a pure-play entertainment firm. By concentrating resources and management on the cable network business and shaking off Rupert Murdoch�� print segment, the firm was able to boost its EBITDA growth as well as its return on capital (ROC). The current metrics of 28.80% and 154% respectively are quite impressive and will be highly beneficial for investors if they can be sustained.
- [By Jayson Derrick]
Albemarle (NYSE: ALB) has agreed to acquire Rockwood Holdings (NYSE: ROC) for $6.2 billion, or $85.53 per share. The acquisition represents a roughly 13 percent premium to Rockwood Holdings' closing price. The newly formed company will combine two of the world's largest specialty chemical companies. According to Albemarle's CEO Luther Kissam the acquisition will result in a “broader customer reach, increased diversity across end markets, technologies and geographies, and more consistent and predictable earnings growth.” Shares of Albemarle hit new 52-week highs of $76.28 before turning negative and closing the day at $70.03, down 3.57 percent. However, shares of Rockwood Holdings hit new 52-week highs of $86.18 before closing the day at $83.14, up 9.83 percent.
