ASH
Ashland Inc
Industrial/Transportation, Event Driven/Special Sit
06/13/2016
Presented
| Date | 06/09/2016 |
| Price | $117.23 |
| Market Cap | $7.39B |
| Ent Value | $9.84B |
| P/E Ratio | 34.56x |
| Book Value | $43.88 |
| Div Yield | 0.01% |
| Shares O/S | 63.00M |
| Ave Daily Vol | 424,023 |
| Short Int | 3.17% |
Current
| Price | $86.99 |
| Market Cap | $4.25B |
| Ashland, Inc. provides the specialty chemicals, technologies and insights. Its chemistry is used in a wide variety of markets and applications, including architectural coatings, automotive, construction, energy, food and beverage, personal care, pharmaceutical, tissue and towel, and water treatment. The company operates its business through three segments: Specialty Ingredients, Performance Materials and Valvoline. The Specialty Ingredients segment offers industry-leading products, technologies and resources for solving formulation and product-performance challenges. The Performance Materials segment provides unsaturated polyester resins and epoxy vinyl ester resins, gelcoats, pressure-sensitive and structural adhesives, specialty coatings and elastomers. This segment also provides metal casting consumables and design services for effective foundry management. The Valvoline segment produces and distributes premium-branded automotive, commercial and industrial lubricants and car-care products. This segment markets Valvoline lubricants and automotive chemicals; MaxLife lubricants for cars with higher mileage engines; NextGen motor oil, created with 50-percent recycled, re-refined oil; SynPower synthetic motor oil; Eagle One and Car Brite automotive appearance products; and Zerex antifreeze. Ashland was founded by Paul Blazer in 1924 and is headquartered in Covington, KY. |
Publicly traded companies mentioned herein: Ashland Inc (ASH), Monro Muffler Brake Inc (MNRO), Quaker Chemical Corporation (KWR)
Highlights
Ashland (ASH) has finally filed to reorganize the company, and Valvoline filed for its initial public offering (May 31, 2016). The presenter has been long the stock and waiting for this catalyst, and is bullish on both ASI (Ashland Specialty Ingredients) and Valvoline (which will trade under the symbol VVV). Based on reasonable multiples to earnings and/ or EBITDA he sees upside to $160 (combined value) from $117 today. He believes the undervaluation in this case is transitory, as mostly chemicals/ industrials investors own ASH today and they don’t have a good feel for the positive consumer aspects of the business (i.e., strong comps, a store growth opportunity, etc.). This will change once Valvoline is independent.
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