Value Investing Challenge Winner: Long Ashland (ASH) ~ market folly

Wednesday, September 18, 2013

Value Investing Challenge Winner: Long Ashland (ASH)

We're posting up notes from the 2013 Value Investing Congress in New York.  Next up is the Value Investing Challenge winner.  Daniel Lawrence of Elmrox Investment Group pitched Ashland (ASH) as a long.

Daniel Lawrence's Value Investing Congress Presentation

Long Ashland (ASH)

Specialty chemical company.

"Misunderstood transformation with significant upside and catalysts."
Used to be commodity chemicals company, and is now a specialty chemical company.  Street is not valuing it for that yet.  Says stock doubles from here.

Owns Valvoline- he says high barrier to entry, but low maintenance CAPEX, less than 2% of sales.
Product portfolio is differentiated, high loyalty rates by consumers.  Market giving no credit for Valvoline, effectively getting it "for free."

Says multiple expansion as market recognizes the transformation.
Why it's cheap?  Street thinks they will make more big acquisitions.  Oil exposure, weak cash flow, underfunded pension. 

Be sure to check out the rest of the presentations from the Value Investing Congress here.

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