Mario Gabelli Increases Stakes in CHMT

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Mar 05, 2015
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Mario Gabelli (Trades, Portfolio) recently increased his stakes in Chemtura Corp (CHMT, Financial) by 8.14%. Gabelli now owns 5,516,352 shares of CHMT.

The stock is currently trading at $26.48 a share. According to the DCF calculator, the stock's fair value is $12.69 with a margin of safety at -109%. Please note the low business predictability ranking of one star may skew the accuracy of the results.

Chemtura Corp markets and manufactures various polymer and specialty chemical products. The company was incorporated in Delaware.

"Combined with the net proceeds from the sale of Consumer Products, we estimate that Chemtura will repurchase approximately 33 million shares, lowering its outstanding shares to 65 million by year-end 2015. Investments in the remaining businesses and potential bolt-on acquisitions will be financed with cash flow from operations. The remaining operations, Industrial Performance Products (petroleum additives and urethanes), and Industrial Engineered Products (bromine and flame retardants and organometallics) are expected to grow revenues via innovations, share gain, and geographic expansion, while the bottom line will benefit from internal actions. In addition, market demand for flame retardants used in electronics and insulation foam applications is showing signs of improvement. We estimate that the “new Chemtura” (exclusive of consumer and agriculture) will generate EPS of $1.45 and $1.85 in 2015 and 2016, respectively. The EPS calculation is based on the already mentioned decline in the shares outstanding. We calculate PMVs of $31 and $40 for 2015 and 2016, respectively," Mario Gabelli (Trades, Portfolio) comments on CHMT, which is from The Gabelli Asset Fund Second Quarter 2014 Shareholder Commentary.

The company's current P/E ratio is 61.30 and the P/B ratio is 2.85.

One warning sign is the P/S ratio of 1.11 is close to the ten-yer high of 1.22. Also, revenue has been declining over the past five years.

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The company's revenue as of September 2014 was ~$2.27 billion.

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