Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
week-end the Florida Gators barely escaped the University of Kentucky Wildcats in
a pitch battle to win the Southeastern Conference of the NCAA Men’s Basketball
Tournament.Few thought Kentucky could get
as close as one point to the favored Florida team.
the road from the Wildcats home territory of Lexington, resides another
team- Covington-based specialty chemicals
producer Ashland, Inc. (ASH:NYSE).The company
produces natural and synthetic polymers from plant seed and cellulose
ethers.Its chemicals have multiple
applications in the pharmaceutical, personal care, food, beverage, energy,
construction, pulp, paper and other industries.Some of the Ashland chemicals get used in composite resins, coatings and
is large, smart company that has changed quite a bit from its origins nearly a
century ago as an oil refinery.Like the
Florida Gators, Ashland has benefited from excellent coaching-leadership
that took Ashland out of the refinery game and into specialty chemicals.
the most recently reported twelve months Ashland recorded $7.8 billion in
sales, providing $686.0 million in net income or $8.74 per share.The company is a chronic producer of cash
resources, converting 8.9% of sales to operating cash flow.Willing to share that largess with
shareholders, Ashland is paying a dividend of $1.36 per share.The dividend yield at the current price level
stock has returned a total of 18.4% over the past year from dividend and price
appreciation.The half dozen or so
analysts who have ratings on the stock have a median price target of
$107.50.That implies a potential total
return of 15.1% if the target is reached in the next year.
has delivered upside surprises in three of the last four quarters.The performance has helped put the stock on
an upward price trajectory that has no significant overhead price resistance.A review of historic trading patterns in ASH suggests
the stock could climb as high as $125.00.Perhaps fundamental analysts have under estimated Ashland- just
like basketball fans missed the tenacity of the Kentucky Wildcats.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies