FMC

FMC Corp

Industrial/Transportation, Event Driven/Special Sit


Presented:03/01/2017
Price:$59.22
Cap:$7.98B
Current Price:$61.76
Cap:$7.71B

Presented

Date03/01/2017
Price$59.22
Market Cap$7.98B
Ent Value$9.45B
P/E Ratio38.15x
Book Value$15.57
Div Yield0.01%
Shares O/S134.80M
Ave Daily Vol1,048,284
Short IntN/A

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: BASF SE (BAS GR), Dow Chemical Corp (DOW), E I Du Pont De Nemours And Co (DD), FMC Corp (FMC), Platform Specialty Products Corp (PAH)

Highlights

The mergers and acquisitions (M&A) environment has been challenging over the last few years and is set to improve. While the Trump administration has yet to announce who will run the Justice Department’s antitrust division and it remains to be seen what direction the DOJ and FTC will go, the worst is likely behind us. It is in this context that he likes FMC Corp (FMC) and he is long the stock at ~$59. The risk/ reward appears to be favorable because the stock is cheap on its own (at ~16x 2018 Street estimates) and the company is well-positioned to be an advantaged buyer of assets that will need to be divested if/ when the $130 billion Dow+DuPont merger proceeds. FMC has the balance sheet capacity to take leverage up from ~2.5x to 4.5x, which would make an all-cash deal in the $2.5-3 billion range feasible.

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