Seeking Alpha: Bludgeoned By Energy, China, And Consumer Electronics, Materion Waiting For The Rebound

When good execution runs into bad market headwinds, it's usually the headwinds that determine the course of the company and that has been the case for Materion (NYSE:MTRN). Although there are a lot of attributes in Materion's favor - including its unique mine-to-mill integration, its strong market share and its demonstrated capabilities in developing new advanced materials and alloys - the company's exposure to weak markets like oil and gas and unimpressive FCF margins and returns on capital are more problematic.

I do believe that Materion will eventually see a recovery in the oil/gas sector and that growth in end markets like defense, aerospace, autos and high-end smart phones can drive revenue growth. I also believe that mid-single-digit FCF margins are attainable as the company leverages more high-value product introductions. While Materion does look undervalued now, this company has never shown the year-in, year-out excellence that I'd like to see from a potential long-term holding.

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Bludgeoned By Energy, China, And Consumer Electronics, Materion Waiting For The Rebound

Seeking Alpha: Eastman Chemical's Taminco Deals Looks Solid

I had been bullish on Taminco (NYSE:TAM) for a little while, seeing it as an undervalued specialty chemical company with a strong foundation in functional amines, specialty amines, and crop chemicals. Eastman Chemical (NYSE:EMN) apparently shared my feelings, as the company announced an acquisition last Thursday at the $26 fair value I indicated in my last piece.

While there is a 30-day "go shop" period for Taminco, I'm not counting on a rival bidder to emerge (though Taminco is a relatively rare quality asset), and I look for Taminco to further Eastman's decade-long transition toward a specialty chemical focus. The immediate upside for Eastman looks relatively modest (around 5%), but I wouldn't underestimate the added diversity, specialty markets, and synergy potential that Taminco will bring with it.

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Eastman Chemical's Taminco Deal Looks Solid