It wasn't supposed to be this way for OM Group (NYSE:OMG).
Selling its cobalt and ultra-pure chemicals businesses and acquiring an
advanced magnets business was supposed to transform this company from a
cyclical commodity business to a growth-oriented specialty materials
business. As it happens, though, the company has seen a much weaker
recovery in Europe than hoped, not to mention lower demand in renewable
energy, medical batteries, and electronics.
Management
meaningfully lowered full-year EBITDA expectations after the
second-quarter report, and more recently, laid out a medium-term growth
outlook that calls for just 2%-3% annual revenue growth through 2017.
The combination of relatively low expected growth and investors
allocating away from specialty materials stocks has led to a one-third
drop in OM Group's share price from the time of my last update in April.
Continue here:
OM Group Hasn't Transformed Fast Enough
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