Kraton Performance Polymers (KRA)
is the kind of stock that gives investors early gray hairs. A cyclical,
seasonal chemical company with significant raw material risk, the
company also has uncommonly high share in its markets. I like the
company's history of innovation and product development, not to mention
the major synergy potential of the proposed merger with LCY Chemical's
SBC business. The cyclicality of the business make discounted cash flow
trickier, while reasonable debate on the "right" EV/EBITDA multiple
could lead to a fair value between $22 and $3
Read more here:
Kraton Offers A Good Story But Some Valuation Questions
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