Friday, October 28, 2016
The hated bounce: Elementis edition
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.
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