Thursday, July 18, 2019

Sika's Excellence No Longer A Secret

It’s been a while (almost two years) since I last wrote on Sika (OTCPK:SXYAY) (SIKA.S), but almost everything that has happened since then has strengthened my view that this is an excellent, if fairly obscure to American investors, specialty chemical company with significant long-term growth potential and a prudently aggressive management team.

With the shares up more than 50% (on the Swiss exchange), Sika shares have significantly outperformed peers and rivals like BASF (OTCQX:BASFY), RPM (RPM), GCP (GCP), and Arkema (OTCPK:ARKAY), so much so that I do worry that the shares have gone too far relative to the weak/weakening underlying trends in construction and autos. This is a stock I’d love to own at a better price, and I’m not entirely convinced I’ll get one, but I think this is a risky time to buy a company with stretched multiples and weakening underlying markets.

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Sika's Excellence No Longer A Secret

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