Chemtura Corp. (CHMT) focuses on higher-margin businesses, having shed divisions that were not performing to the desired level, and benefiting from exposure to sectors of the economy that are improving and which may translate into upside, says Daniel Rizzo, Analyst at Sidoti & Company, LLC.
“I like Chemtura, too. I think that stock is well-positioned. They are really changing the way they do business. They focus on much more high-margin and profitable businesses. They sold off the antioxidants business, which is a little bit lower margin. They also should benefit from housing in the consumer segment. They have exposure to agriculture. Their electronics end market has been weak, but it’s showing strong signs of life,” Rizzo said.
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Chemtura also may take part in the M&A wave in the specialty chemicals space that is expected for 2013. Chris Kapsch, Analyst at Topeka Capital Markets, says investors expect the company to maintain a growing core while managing their portfolio.
“I think people in 2013 are still looking for M&A to be a catalyst for one way or another for a majority of the stocks. One company in my space, Chemtura, investors have fairly high expectations that they will continue to manage their portfolio, meaning maybe carve off another business or two while also looking to grow their core industrial businesses,” Kapsch said.
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