ASH
Ashland Inc.
Industrial/Transportation
01/12/2015
Presented
| Date | 01/09/2015 |
| Price | $120.01 |
| Market Cap | $8.30B |
| Ent Value | $10.19B |
| P/E Ratio | 40x |
| Book Value | $51.19 |
| Div Yield | 1.1% |
| Shares O/S | 69.17M |
| Ave Daily Vol | 1,020,000 |
| Short Int | 6.61% |
Current
| Price | $86.99 |
| Market Cap | $4.25B |
| Ashland Inc. operates as a specialty chemicals company worldwide. The company’s Specialty Ingredients segment provides products, technologies, and resources for solving formulation and product-performance challenges. It offers solutions using natural, synthetic, and semisynthetic polymers derived from plant and seed extract, cellulose ethers, and vinyl pyrrolidones, as well as acrylic and polyurethane-based adhesives for consumer and industrial applications. This segment serves pharmaceutical companies; makers of personal and home care products, food, and beverages; manufacturers of paint, coatings, and construction materials; packaging and converting markets; and oilfield service companies. Its Performance Materials offers composites, intermediates and solvents, and elastomers, including polyester and vinyl ester resins, as well as gelcoats, maleic anhydride, butanediol, tetrahydrofuran, n-methylpyrolidone, emulsion styrene butadiene rubber, and other intermediates and solvents. This segment serves manufacturers of residential and commercial building products; infrastructure engineers; wind blade and pipe manufacturers; auto, truck, and tire makers; boat builders; adhesives, engineered plastics, and electronic producers; and specialty chemical manufacturers. The company’s Valvoline segment produces and distributes automotive, commercial, and industrial lubricants, automotive chemicals, and car-care products. It also markets lubricants and automotive chemicals under the Valvoline brand name; lubricants for higher-mileage engines under the MaxLife brand name; motor oil under the NextGen brand name; synthetic motor oil under the SynPower brand name; automotive appearance products under the Car Brite brand name; and antifreeze products under the Zerex brand name. In addition, this segment operates and franchises approximately 920 Valvoline Instant Oil Change centers in the United States. The company was founded in 1924 and is headquartered in Covington, Kentucky. |
Publicly traded companies mentioned herein: Ashland Inc (ASH)
Highlights
The presenter is long shares of Ashland (ASH) at $120 and sees a number of potential near-term catalysts driving upside for shareholders. He thinks the company will focus on specialty chemicals, and looking at the three remaining business segments [Specialty Ingredients (ASI), Valvoline, and Composites] following the sale of its Water Technologies business (early 2014), the restructuring opportunity appears to to be clear. Whether he uses a sum-of-the-parts analysis or a reasonable 14.5x multiple on his 2016 EPS estimate (at $10 he is ahead of the Street by $1.30) shares should be worth at least $145 per share. If the company were to be sold, he estimates a buyer might be willing to pay upwards of $160-170.
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