Friday, October 28, 2016

The hated bounce: Elementis edition

This post is a cliche.

Elementis is a specialty chemical company which makes rheology modifiers (go on - look it up).

The company has two customer groups that are problematic - oil drillers and ship painters.

They provide additives for oil drilling mud to allow difficult drilling. And they supply additives to paints to change their technical characteristics - which have their most profitable use in painting ships.

Both shipping and oil drilling have been difficult.

The company has had six straight profit warnings. Elementis never became unprofitable - just less profitable.

Today Elementis put out an utterly uneventful trading update.

And the stock rose ten percent.

When you have had six profit warnings no news is good news.




John

3 comments:

admin said...

Bought it yesterday.

Anonymous said...

Just started looking into Elemtis but it appears as if there has been a second hectorite source been developed (http://imformed.com/worlds-second-hectorite-source-on-stream/) yet no idea if this is comparable to the stuff produced by Elementis. Do you have a view on that?

Robert Linde said...

Most small companies start based on the resources of the business owner. If you do not have a lot of cash or have access to large personal means of financing then it is nearly impossible to successfully start, expand or even maintain your company. See more corporate profile sample

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