Friday, April 8, 2016

Seeking Alpha: Innospec Muddling Through Better Than Most

Small specialty chemical company Innospec (NASDAQ:IOSP) continues to operate pretty strongly despite headwinds that would (and have) smacked other companies hard. Back in May of 2015, I thought the valuation was a little iffy and that it would be best to wait for a pullback; the shares did pull back into the low $40s in late summer before an impressive run to almost $60. Then the weight of weakness in the oilfield really hit the stock, sending the shares back down almost where we started from back in May of 2015.

It's probably too much to hope that Innospec sees its oilfield chemicals business return to growth this year, but the business has remained profitable and likely will stay so long as conditions don't worsen (another oil price pullback to old lows). Meanwhile, I think the fuel additives business will continue along while the performance chemical business grows nicely with strong volume growth driven by the personal care segment. With a clean balance sheet, and a stated desire to do more deals, I'm tempted to look past what will be a tough 2016 and pick at these shares now that they once again appear undervalued.

Continue reading here:
Innospec Muddling Through Better Than Most

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