Seeking Alpha: Occidental Has A Good Plan, And Some Value Left

Despite relatively good returns on capital and a solid asset base, Occidental Petroleum (NYSE:OXY) hasn't really been at the top of the Street's list of favorites in the oil and gas sector. Now, management is pushing on with an ambitious restructuring plan that will see its once-core California business spun out on its own, a likely sell-down of its assets in the Middle East and North Africa, and a more aggressive drilling program in the Permian. All told, Occidental should be looking at better production growth and stronger returns than most large peers, with an enhanced oil recovery program supporting a decent dividend. A combination valuation methodology supports a fair value above $110, which I think is a decent implied return.

Follow this link to the full article:
Occidental Has A Good Plan, And Some Value Left

Seeking Alpha: It's Getting Harder To Give Axiall The Benefit Of The Doubt

At some point a company's problems cease to be cyclical and start looking increasingly structural. I'm getting close to that point with Axiall (NYSE:AXLL). Six consecutive earnings misses may say more about the analysts following the stock than the quality of the company, but management's own missteps and changes in the chloralkali space have more concerned about the prospects for this company. I do still believe that the company can leverage positives like an improving U.S. construction market (whenever that arrives...) and increasing shale gas production, but I'm not convinced that the value is so compelling as to be worth the risk anymore.

Continue reading here:
It's Getting Harder To Give Axiall The Benefit Of The Doubt

Seeking Alpha: Can Magellan Find A Route To An Even Higher Multiple?

Magellan Midstream Partners, LP (MMP) stands out in the MLP crowd for a lot of positive reasons. The company is a large player in refined product distribution, and is expanding its crude oil transportation business. The company's fee-based business model generates consistent performance, and the company's decision years ago to acquire its GP units and unwind the incentive distribution rights gives it a simpler structure and much lower cost of capital. Add in growth-oriented capital projects and a respectable balance sheet, and there's a lot to like.

Unfortunately, I think the Street likes it a little too much. I would definitely not bet against this company, but the valuation seems to imply either a level of distributable cash flow growth that I find improbable, or a discount rate that I find unpalatable for equity investments. Other readers may not be bothered by the low discount rate given the many good qualities of this business, but I just don't see enough upside for my own investment purposes.

Continue here:
Can Magellan Find A Route To An Even Higher Multiple?

Seeking Alpha: Axiall Stuck In A Commodity Tug Of War

I have little use for beta as a measure of risk, but it is a good measure of volatility and Axiall's (AXLL) beta of over 3.0 (against a comp group of Westlake (WLK), Dow Chemical (DOW), and Olin (OLN) that ranges from 1.1 (Olin) to 2.4 (Westlake)) underscores how vulnerable these shares are to prevailing prices and sentiment for caustic soda, natural gas, ethylene, and so forth. That leads me to conclude that the market moves these shares a great deal more on the basis of what is happening right now in the chemical markets and much less on the basis of what could happen as the company reaps further synergies from the businesses it acquired from PPG (PPG) and the North American housing market continues to recover.

This makes Axiall a challenging stock. Although it has done okay since my original recommendation on July 10, the PVC industry hasn't seen the sort of demand that was expected during the summer of last year. These shares appear to be more or less fairly valued on the basis of near-term results, though I continue to believe there is double-digit upside for those willing to hold in the hopes of a housing-led improvement in the PVC market later in 2014.

Continue to Seeking Alpha here:
Axiall Stuck In A Commodity Tug Of War

Seeking Alpha: Still Time To Think About Going All-In On Axiall

Even with my dedication to the philosophy of "enlightened torpor" with respect to changing up my portfolio, there are times where it's worthwhile to consider secular trades or themes. While many stocks have already enjoyed a pretty good run on the back of improving expectations for the U.S. housing market, there are still a few ideas left that hold potential.

One of those ideas to consider is Axiall (AXLL) - the new chlor-alkali giant that has emerged from the combination of Georgia Gulf and PPG's (PPG) commodity chemical business. Investors and analysts wigged out in response to higher-than-expected ethylene prices in the first quarter, but the company's outsized exposure to U.S. housing, potential PVC margins, and synergy possibilities make this a name still worthy of consideration. As it is a commodity chemical, though, investors should realize that this is a consummate example of a stock that is bought to be sold - this is not a stock I'd imagine many investors would want to hold for a decade at a time.

Please continue reading here:
Still Time To Think About Going All-In On Axiall

Investopedia: Apache Buy Today For Tomorrow's Rewards

So far, 2012 has looked like a year of risk aversion in the energy space. By and large, the bigger you look, the better your returns have been - the stocks of companies like Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have done pretty well, while companies like Anadarko (NYSE:APC) and Apache (NYSE:APA) have languished by comparison. Although I see that Apache's recent production growth guidance cuts aren't going to make it the hottest property in the space, I still believe that investors ought to consider owning this name for its combination of long-term potential and near-term value.

Continue here:
http://stocks.investopedia.com/stock-analysis/2012/Apache-Buy-Today-For-Tomorrows-Rewards-APA-XOM-CHK-OXY0816.aspx

Investopedia: Eni Still Not Getting Much Love

Admittedly these aren't the best of times for energy companies, but it's even worse for those whose assets lean towards natural gas and/or politically dicey areas. Eni (NYSE:E) has never been among the most-loved major energy companies, but valuation is now starting to look quite interesting. With progress on divestitures and big discoveries off the coast of Mozambique, there's still work to do, but management has taken some solid positive steps.

Read more here:
http://stocks.investopedia.com/stock-analysis/2012/Eni-Still-Not-Getting-Much-Love-E-APA-OXY-PBR0604.aspx

Investopedia: Occidental Petroleum Has Taken A Different Path

There are a lot of odd things about Occidental Petroleum (NYSE:OXY) in the context of the broader energy sector. While investors have generally cheered the decisions of companies like ConocoPhillips (NYSE:COP) to separate from their refining and/or chemical businesses, Oxy seems in no particular hurry to match. Likewise, Oxy has a pretty good record of cash flow production and returns on internal investment, and while management has received rather generous compensation, they actually seem to run the business like a business.

Not that any of that has helped all that much lately. Oxy has fallen along with many other energy companies, and there are the usual worries here about the company getting stuck between rising production costs and declining realizations. All of that said, today's valuation suggests investors ought to take another look at this company as a longer-term quality energy play.

Continue here to read more:
http://stocks.investopedia.com/stock-analysis/2012/Occidental-Petroleum-Has-Taken-A-Different-Path-OXY-APA-XOM-CHK0531.aspx

Investopedia: Is There Enough Economic Growth To Push Olin Higher?

The easy days are long over for companies that represent leveraged plays on economic growth. There may still be a feeling of general malaise and disappointment in the economic recovery, but the numbers are what they are and economic activity is strongly up off the bottoms. That represents a problem for Olin Corp (NYSE:OLN), as this chemical manufacturer has enjoyed a solid recovery from the depths of the recession, but now has to find a way to maintain the momentum.

A Mixed Fourth Quarter  
All in all, Olin's performance for the fourth quarter was fairly mixed. Revenue rose about 16% as the company offset lower volume in chloralkali and caustic potash with higher netbacks. The company's operating rate was a disappointing 70%, though, and well below industry averages for the quarter.

Please follow this link for more:
http://stocks.investopedia.com/stock-analysis/2012/Is-There-Enough-Economic-Growth-To-Push-Olin-Higher-OLN-OXY-PPG-WLK0201.aspx