Investopedia: Eastman Chemical Seems To Get The Long-Term Picture

It's interesting that Eastman Chemical (NYSE:EMN), Eastman Kodak's discard, is going to be the company that survives as the more viable going concern. To management's credit, they seem to understand the value of defensible markets and the need to wall off and dispose of businesses in long-term decline. With the announced acquisition of Solutia (NYSE:SOA), Eastman Chemical is taking another important step towards being a diversified specialty chemical company.

Is Solutia the Solution?
Eastman is paying about $4.7 billion in total enterprise value for Solutia, or about nine times trailing EBITDA. That's not an especially cheap price, but it's not so unusual for a takeout of a quality specialty chemical name. When Berkshire Hathaway (NYSE:BRK.A) acquired Lubrizol, the premium it paid was only about 80% less even though that was a very different market at the time. (For related reading, see EBITDA: Challenging The Calculation.)


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http://stocks.investopedia.com/stock-analysis/2012/Eastman-Chemical-Seems-To-Get-The-Long-Term-Picture-EMN-SOA-BRK-A-DD-DOW0201.aspx

Investopedia: OM Group - Just Another Cheap Commodity Play, Or Something More?

At first glance, it probably seems fair that OM Group (NYSE:OMG) is trading at a low valuation. The company's cobalt business has seen significant price erosion in cobalt, the battery business is heavily weighted towards defense and aerospace, the electronics/chip business is terrible and the company doesn't seem to know what it wants to be.

Despite all of this, the company has good positions in growth markets, a well-respected new CFO and a relatively clean balance sheet. It is by no means the safest stock in the market today, but if OM Group can exercise on its apparent vision of becoming a leading player in multiple specialty chemical markets, the stock is too cheap today. (For more, see Earning Forecasts: A Primer.)

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http://stocks.investopedia.com/stock-analysis/2012/OM-Group---Just-Another-Cheap-Commodity-Play-Or-Something-More-OMG-DOW-SOA-GB0116.aspx

Investopedia: OM Group - Unreasonably Cheap, Or Cheap For A Reason?

Though I have not owned it in many years, I've been a fan of OM Group (NYSE:OMG) for some time, particularly as the company's management tries to diversify the business and steer it away from such heavy reliance on cobalt. Although this is not a well-followed company at all, is still quite dependent on cobalt prices, and has not proven that it can deliver consistently strong returns on capital, today's valuation seems to expect far too little from this specialty materials company.

Crosscurrents in Q3 

Given that there is only one published earnings estimate for OM Group, the question of whether the company disappointed with its third quarter results, is largely irrelevant. Nevertheless, it was a quarter that seemed to be mixed with good and bad news.

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http://stocks.investopedia.com/stock-analysis/2011/OM-Group---Unreasonably-Cheap-Or-Cheap-For-A-Reason-OMG-FCX-SOA-ALB-GB-STP-SCCO-AMSC1115.aspx

Industrial-Strength Performance At RPM

Specialty chemicals is one of those catch-all categories that seems convenient but is actually pretty worthless in practice. Cytec (NYSE:CYT), WR Grace (NYSE:GRA), Solutia (NYSE:SOA) and RPM International (NYSE:RPM) all carry this label, but the similarities are few and far between apart from a general exposure to rising input costs. Nevertheless, looking a little deeper sometimes pays off, for while RPM needs a better housing market to really do well, the stock could be an attractive dividend-plus-capital-gains story for patient investors. 

The Quarter That Was
RPM's fiscal first quarter results require a little bit of explanation. As reported, sales were down about 2%, but this is a case where "as reported" is not very accurate. The company elected to deconsolidate its Specialty Products Holding Company subsidiary and allow it to go into bankruptcy to help resolve asbestos liabilities. Not only does that take away some units like Day-Glo and Dryvit, but it also makes historical comparisons misleading. 


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http://stocks.investopedia.com/stock-analysis/2010/Industrial-Strength-Performance-At-RPM-RPM-KRA-SHW-FOE-CYT-SOA-GRA1008.aspx