Q1-2009 Small Cap Industry Outlook - Chemicals

Posted by

December 22, 2008

There are only four small cap groups we’re particularly excited about as we enter into the first quarter of 2009, and chemicals is one of them. (Read below for access to the other three, plus our thoughts on some small cal groups to avoid). As for small cap chemicals…

The primary concern regarding the recent strength is the lack of volume behind those gains… though it’s a marketwide problem as well. Nevertheless, this group trades independently of the market, and these companies continue to fare well in the face of continued economic turbulence. Prominent small caps in this group are Ashland Inc (ASH), Celanese Corp. (CE), and FMC Corp. (FMC). The average price/earnings ratio of these there stocks is a stunning 6.2, and margins are respectable (though Ashland’s been struggling on the earnings front lately). Updated analyst estimates for next year are now in, and the bar has been set very low compared to 2008’s actual results.

If you’d like to know more about the methodology behind our quarterly sector outlook, or if you’d just like to see our entire small cap sector report, there are two ways to do so. You can visit the web page here…
http://bluegrassportfolio.com/q1-2009-small-cap-sector-and-industry-outlook/

Or you can download the printable PDF version here….
http://bluegrassportfolio.com/Q12009BPMSmallCapreport.pdf

Share and Enjoy: