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August 08, 2011 – Comments (19) | RELATED TICKERS: HUN

There certainly has been a lot of carnage during the recent stock market tumble, but one that has really caught my eye is Huntsman Corporation (HUN). It reported a solid quarter, missing estimates by only a penny and its stock is down over 40% over the past couple of weeks. Ouch.

Two major reasons why the company missed estimates are the recent strength of the Swiss currency (which doesn't appear to be about to change) and high commodity costs. This recent implosion in the markets has certainly taken care of the latter. Oil has fallen off of a cliff, so that will help on the cost side. Of course, recessions (if you believe that we're headed back into one) are obviously not great for specialty chemical companies, but I am inclined to believe that the recent sell-off in Huntsman has bee somewhat overdone. It's currently quite a bit cheaper than the average company in its sector looking at a number of metrics, like price/sales, price/book, price/earnings.

The company recently announced a special $100 million stock buyback and it pays a dividend of over 3%.

I'm just starting to sniff around HUN. Is anyone out there familiar with the company. If so, I'd love to hear your thoughts on it.  Also, I'd love to hear what other stocks have jumped off the page at you as being exceptionally cheap right now.

Deej

19 Comments – Post Your Own

#1) On August 08, 2011 at 11:02 AM, ResearchLover (26.65) wrote:

DLB beat estimates, And took another $10 haircut.  Seems cheap even if dolby sound won't be a feature in windows 8.

 

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#2) On August 08, 2011 at 11:03 AM, ResearchLover (26.65) wrote:

...and DLB is buying back $250M in stock.

 

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#3) On August 08, 2011 at 11:32 AM, TMFRosetint (98.60) wrote:

There are plenty of cheap stocks out there. The market is like a bipolar schizophrenic; it is prone to wild mood swings and often delusions of reality. If it's going to throw the baby out with the bath water, why not capitalize on it?

 I'm glad to see that some people have a similar temperament to my own. 

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#4) On August 08, 2011 at 11:39 AM, ajm101 (31.91) wrote:

Anyone have feelings on FOE or CHMT?  Certainly a rout out there in specialty chemical producers.

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#5) On August 08, 2011 at 12:59 PM, Teacherman1 (55.68) wrote:

Deej

A couple of years ago, they were supposed to be bought out by Apollo, but Apollo backed out of the deal saying their banks were not going to honor their financing committment.

Huntsman let Apollo off, but sued the banks. They had a trial in Huntsville, Texas, which came out favorably for Huntsman, but being the nice people that they are, they let the banks off easy.

They got some cash ( a lot less than they could have ), and some financing.

They have done very well since then, and I expect they will continue to do so in the future.

They are a specialty chemical company.

There is a strong family presence in how the company is run, but don't know how much longer that will be. The obvious "heir apparent" to take the reins, is Jon Huntsman, who was the Ambassador to China, and is now running for President, so don't know if he will be there to take over in the future.

I realize this is not funamental information, but thought you might like to know a little more about them, just in case you were not aware of this.

Let us know what you find out when you go digging.

I don't think they are in any danger of going away, and are down pretty much for the same reason that others are.

Have a good day digging through the "trash pile of a market" we currently have.

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#6) On August 08, 2011 at 2:48 PM, TDRH (99.65) wrote:

Deej,

        What do you think about Sun Healthcare? (SUNH)   You had a strong pitch on it some time ago.   Recently it has just been pounded.  

 

James

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#7) On August 08, 2011 at 2:48 PM, TDRH (99.65) wrote:

Deej,

        What do you think about Sun Healthcare? (SUNH)   You had a strong pitch on it some time ago.   Recently it has just been pounded.  

 

James

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#8) On August 08, 2011 at 2:48 PM, TDRH (99.65) wrote:

Deej,

        What do you think about Sun Healthcare? (SUNH)   You had a strong pitch on it some time ago.   Recently it has just been pounded.  

 

James

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#9) On August 08, 2011 at 2:53 PM, KommanderKhaos (46.13) wrote:

Right there with ya on Huntsman, Deej. :)

http://caps.fool.com/Blogs/anyone-buying/623590

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#10) On August 08, 2011 at 2:59 PM, kdakota630 (29.56) wrote:

Right now I'm looking at your pick from over a year ago (IPSU) and can't believe it dove like it did the other day.

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#11) On August 08, 2011 at 2:59 PM, KommanderKhaos (46.13) wrote:

PCX is one that I have been eying with great intent, as they have been absolutely HAMMERED over the past ten days. It's a high beta and volatile stock to begin with, so it often tends to move upward (whenever that might be) just as sharply and violently as it falls downward. Very interesting stock...

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#12) On August 08, 2011 at 3:23 PM, eldemonio (98.53) wrote:

MSA is a company that recently reported a monster quarter and increased dividend.  They haven't been slammed as hard as some of the other companies, but the upside to buying now is huge. 

Many people shy away because they think MSA only deals with mine safety - morons.

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#13) On August 08, 2011 at 3:58 PM, TMFDeej (99.32) wrote:

Thanks for sharing your thoughts everyone.  It seems like anything related to nursing, elder care REITs, etc, has gotten hammered over the past several weeks, TRDH.  I wish I knew more about the government's plans for reiimbursement for the sector, but I suppose that the uncertainty is what is causing the opportunity right now.  There's certainly going to be enough customers for these places going forward with the U.S.' aging population.  The question is whether anyone will be able to pay them.  I'm guessing yes and that this selloff is overdone, but who knows at this point.  I'm still long HCA in CAPS, but I haven't bought any in real-life.

Whenever we have panics in the market like we are experiencing, I try to limit my buying to things that have awesome yields...it makes buynig easier because assuming that they are sustainable.  We aren't experiencing the credit market freeze this time around like we were last time, so the bonds that I was buying back then aren't around.  That's why I've been looking at stuff that pays dividends and preferreds.  If I can assure myself og getting 6%, 8%, or even more going forward it makes the purchase process at this point a little easier to swallow. 

Deej

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#14) On August 08, 2011 at 4:06 PM, TMFDeej (99.32) wrote:

I meant to say SUNH not HCA.  BTW, if you like SUNH and think that they will survive you may want to take a look at SBRA.

Deej

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#15) On August 08, 2011 at 4:07 PM, TMFDeej (99.32) wrote:

Thanks for the background information on HUN, teacherman.  I remember the company being bought out (and then not) back in the day.  It is arguably in much better shape today than it was back then, though the economy not so much. 

Deej

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#16) On August 08, 2011 at 4:10 PM, TMFDeej (99.32) wrote:

Thanks for the link, Kommander.  I might be interested in BBEP and SDRL, but I'm definitely not interested in XRX and PSEC.  I have a deep dislike (I'm trying not to say hatred any more) of all BDCs.

Deej

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#17) On August 08, 2011 at 4:12 PM, TMFDeej (99.32) wrote:

Hey kdakota.  Fortunately I closed out of my IPSU long in CAPS a couple of months ago.  Apparently this is what happens to companies in the current environment that don't give analysts a heads up about a bad quarter. Analysts were expecting IPSU to report a profit of $0.46/share but it actually reported a loss of $1.35/share. Ouch. It looks like this was a result of higher input costs that could not be passed along to consumers because of intense competition. This isn't to say that this is not an interesting price for the company, but it doesn't look like this miss is a result of a fixable problem like the plant explosion that IPSU had a while ago.  I'm not buying at this level.  Ths story is different this time.

Deej

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#18) On August 08, 2011 at 5:04 PM, TMFBlacknGold (98.68) wrote:

Deej,

   HUN and SDRL are also on my list. Take a look at MDR. Down another 20% today with oil and the market. Just like HUN, it's easily worth double its valuation.

BlacknGold

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#19) On August 08, 2011 at 7:12 PM, TDRH (99.65) wrote:

Deej,

        Thanks for the reply.   Apologies for posting three times, not sure what happened.

        If you are looking for yield and potential stability the pipeline companies have been beaten up pretty bad.   I am tracking several.  I have owned KMR in the past, but sold out of it.  Considering reeentry.

 

James  

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