Friday, October 28, 2016

The hated bounce: Elementis edition

This post is a cliche.

Elementis is a specialty chemical company which makes rheology modifiers (go on - look it up).

The company has two customer groups that are problematic - oil drillers and ship painters.

They provide additives for oil drilling mud to allow difficult drilling. And they supply additives to paints to change their technical characteristics - which have their most profitable use in painting ships.

Both shipping and oil drilling have been difficult.

The company has had six straight profit warnings. Elementis never became unprofitable - just less profitable.

Today Elementis put out an utterly uneventful trading update.

And the stock rose ten percent.

When you have had six profit warnings no news is good news.



admin said...

Bought it yesterday.

Anonymous said...

Just started looking into Elemtis but it appears as if there has been a second hectorite source been developed ( yet no idea if this is comparable to the stuff produced by Elementis. Do you have a view on that?

Robert Linde said...
This comment has been removed by a blog administrator.

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author.  In particular this blog is not directed for investment purposes at US Persons.