When you find a chemicals company that can routinely post
double-digit returns on assets and invested capital, it's worth paying
attention. Likewise, not many $1 billion companies can get meaningful
share in markets when competing against behemoths like the chemical
operations of Exxon Mobil (XOM) and Chevron (CVX), or Berkshire Hathaway's (BRK.A) Lubrizol. Now, with Innospec (IOSP) making it clear that growing its oilfield chemicals business is a priority, I'd say the story is getting better.
Valuation still remains an issue. I've liked Innospec as a company for quite some time, but as I observed
about six months ago, the valuation was and is fairly demanding. The
stock hasn't done much in the interim, and I'm likewise concerned that
investors buying today may be facing a wait as the company "grows into"
its valuation and as the market expects more moves to build the oilfield
operations.
Read the full article here:
Still Waiting For A Better Entry Point On Innospec
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