Chase Corp (NYSEMKT:CCF)

Valueinvestorclub pitch:

Chase Corporation is a leading manufacturer of protective materials for industrial applications requiring high reliability in a wide variety of industrial end markets. The company specializes in making protective sealings, coatings, and tapes for critical applications in which protecting a small component from failure due to stress or wear can cause expensive repercussions for the manufacturer – such as recalls for automotive OEMs, or expensive downtime and repair in other applications. As such, Chase’s products typically comprise a small percentage of the cost of the end-product or project, but high value for the customer in the savings that come from avoidance of performance failure.

CCF organizes it business into three business segments organized by product type:

The Industrial Tapes segment specializes in wire and cable materials, specialty tapes, and laminated and coated products. Products include insulating and conducting materials for wire and cable, pulling and detection tapes for fiber optic cables and water and gas lines, and laminates and laminated durable papers for use in electronic packaging markets. Primary customers include cable manufacturers, utilities, and telecoms, as well as electronics manufacturers and assemblers.

The Adhesives, Sealants, and Additives (ASA) segment develops specialized products including moisture protective coatings and cleaners, polymeric microspheres, polyurethane dispersions, and super-absorbent polymers. These products are used primarily in the transportation, appliances, medical, and environmental markets as well as general industrial applications.

The Corrosion Protection and Waterproofing segment largely comprises infrastructure project-oriented products sold under the Chase brand. Products include protective coatings for pipelines, adhesives and sealants used for waterproofing and liquid storage, polymeric asphalt additives, and expansion joint systems used in transportation and architectural markets. End markets include oil, gas, and water pipelines, highways and bridge decks, wastewater containment systems, and commercial buildings. This segment tends to be mildly seasonal, with higher sales in the North American spring and summer construction season.

Solid, slow growth company with rock-solid balance sheet. Continually growing revenue, growing free cash, absolute bear minimal debt. Leadership seems competent and set on slow-growth and doing things right, and their history and balance sheet reflects this.

Risks would include huge downturn in commercial construction.