NewMarket Corp. (NYSE:NEU)
is an unusual company in many respects. A strong player in additives
for lubricants and petroleum-based fuels, it has an enviable track
record for EBITDA margins, cash flows, and returns on capital when
compared to other specialty chemical companies. The company has been
fairly generous about return capital to shareholders, but a lack of
stock splits has led to a high absolute share price and somewhat thin
trading volume, as well as minimal sell-side coverage. What's more,
while NewMarket is good at what it is and generates healthy cash flow,
it has taken a different path from many of its specialty chemical peers
that have been looking to deploy their cash flow into diversifying
acquisitions.
I like how NewMarket operates, and I
think the expansion of the company's presence in Asia will improve the
company's top line growth prospects. That said, I still don't believe
the overall top line growth outlook is all that good, and the share
price already seems to anticipate quite a bit of cash flow growth.
Read more here:
NewMarket Needs To Find New Markets To Drive Growth
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