Solvay (EBR:SOLB) in Palm Harbour Capital 2024 Q2

Strategic Positioning Amidst Market Volatility

Apr 15, 2025

Summary

Investment rationale: Strong free cash flow and dividend yield.
Market positioning: Leading chemicals company with diverse product lines.
Risks and challenges: Volatile raw material prices and energy costs.
Recent performance: Share price increased by 32.2% in Q2 2024.
Future outlook: Continued focus on cash flow generation and dividend sustainability.

Solvay (EBR:SOLB, Financial) was highlighted in Palm Harbour Capital's 2024 Q2 letter as a key performer, reflecting the fund's focus on companies with strong cash flow and dividend potential. The Belgian chemicals company reported a decline in sales and EBITDA year-over-year; however, volumes showed positive effects after seven quarters of declines. The company's free cash flow remains robust, supporting a double-digit free cash flow yield and a 7.5% dividend yield.

"The shares were helped early in the quarter as Greenlight Capital’s David Einhorn (Trades, Portfolio) pitched the stock at the New York Sohn Conference. The stock continues to trade on a double-digit free cash flow yield and a 7.5% dividend yield on what we believe are trough earnings." — Palm Harbour Capital, 2024 Q2 Fund Letter

Read full letter at gurufocus Palm Harbour Capital 2024 Q2 page.

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