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IBDvalueinvestin (99.66)

I may have been wrong about DOW missing estimates this qtr.

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April 18, 2012 – Comments (3) | RELATED TICKERS: DOW

I just ran across a story on the Wall Street Journal that says ethane has fallen -39% in QTR 1 of 2012

Ethane is a natural-gas liquid, or NGL, that is produced alongside natural gas. It is used primarily to make ethylene, which is used in turn to make plastics and other chemical products. 

So based on above findings DOW expenses for making plastic & other chemicals should have dropped compared to 4th qtr 2011.

 

I am retracting the statement I made yesterday about DOW not being able to meet estimates this qtr.

3 Comments – Post Your Own

#1) On April 18, 2012 at 2:21 PM, Frankydontfailme (27.77) wrote:

But everyone knows these chemical companies use cheap natural gas, how is this not priced into the stock price and estimates?

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#2) On April 18, 2012 at 2:24 PM, IBDvalueinvestin (99.66) wrote:

Ethane was 39% more expensive on Dec. 31, 2011 than it is today.  DOW stock price basically flat since then, only went from $29 to $34+ , a $5/shr gain..

That means its not priced in.

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#3) On April 18, 2012 at 3:10 PM, Frankydontfailme (27.77) wrote:

Or the outlook for chemical sales have made up the difference.

Also 5 dollars per share is what? 15% increase in market cap?

 

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