FMC

FMC Corp

Industrial/Transportation


Presented:08/10/2016
Price:$47.88
Cap:$6.44B
Current Price:$61.76
Cap:$7.71B

Presented

Date08/10/2016
Price$47.88
Market Cap$6.44B
Ent Value$8.23B
P/E RatioN/A
Book Value$14.93
Div Yield0.01%
Shares O/S134.58M
Ave Daily Vol1,382,287
Short Int5.45%

Current

Price$61.76
Market Cap$7.71B
FMC Corp. is a diversified chemical company, which serves agricultural, consumer and industrial markets globally with innovative solutions, applications and market leading products. The company operates its business through the following segments: Agricultural Solutions, Health and Nutrition and Lithium. The Agricultural Solutions segment is aligned principally around meeting the crop protection needs of food and fiber producers globally. This business segment is poised to introduce a new generation of product, including biological. The Health and Nutrition segment is aligned to serve pharmaceutical, nutraceutical, food and personal care customers with an expanding portfolio of high performance, value added, nature based ingredients for their products. The Lithium segment manufactures lithium for use in lithium products, which are used primarily in energy storage, specialty polymers and chemical synthesis application. The company was founded by John Bean in 1883 and is headquartered in Philadelphia, PA.

Publicly traded companies mentioned herein: FMC Corp (FMC)

Highlights

The presenter is long shares of FMC Corp (FMC) and believes there is a relatively clear path for earnings per share to grow from the $2.70 - $2.90 range (full year 2016) to $4.90 looking two-to-three years out. With the stock trading at ~$48.50 the risk/ reward is favorable because “just about everything that could have gone wrong went wrong in 2015”. Synergies from the Cheminova deal alone should contribute $1 of the incremental EPS he is forecasting, and a reversal of FX headwinds (namely the Brazilian Real) and a recovery of lost ag chemicals revenue (ex-FX) should contribute $0.50 each to make up the difference. He stated, “Regardless of your view of the ag cycle, the story here is that FMC will be comping against all of the negative factors from last year and growing earnings at a high rate”. At 10x consensus EBITDA estimates for 2017 (and 15.5x EPS forecasts), the stock is cheap. Assuming the same multiple framework holds, shares should trend up to the low $70s over the next 12 - 24 months (15x his fully synergized $4.90 EPS forecast).

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Idea Discussion

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