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$27.16 0.26 (0.97%)
7/24/2008 9:42 AM

Olin Corp (OLN)

CAPS Rating:
*****

A manufacturer concentrated in three business segments: Chlor Alkali Products, Metals, and Winchester.

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Recs

3

Avatar Imperial1964 (90.89) Submitted: 6/11/07 9:45 PM : Outperform Start Price: $18.67 OLN Score: 58.59

I had picked this stock a while back and got frustrated with its lack of capital gains and CAPS not counting dividends.

It is still a value and I am jumping back on. Perhaps with real money.

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Avatar 12jimmy34 (40.22) Submitted: 6/19/07 2:38 PM

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I have 100 shares and it is not moving!! Everyone even cramar says this stock should move higher, maybe double?

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Avatar StockSpreadsheet (76.40) Submitted: 6/21/07 11:11 PM

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Just so you know, CAPS does count dividends. I've had long discussions about this with the Fool team as I thought they didn't account for dividends properly. I have been assured that their offsets to stock price adequately reflect the value of dividends and accept their assurances. They reduce your initial cost basis of the stock to reflect dividends paid, at a percentage equal to the yield percentage of the stock.

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Avatar Imperial1964 (90.89) Submitted: 6/27/07 3:52 PM

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They do count them now. I'm sorry I didn't write it clearly: They weren't counting dividends when I first made the pick.

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Avatar Imperial1964 (90.89) Submitted: 6/27/07 4:01 PM

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I doubt it will double unless it is clear that their hugely cyclical Chlor Alkali business is still on the upswing. Their current projections are a slight decline in revenue in 2007 over 2006.

I still think they are quite undervalued, though. Their (tiny) Winchester division is on an upswing in a big way. Even with a slight decline in Chlor Alkali, it will still be hugely profitable. From my crude calculations, it would take a sustained 50% drop in earnings at Chlor Alkali to justify the current low valuation. (Assuming earnings wouldn't drop further in subsequent years).

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