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Strategies & Market Trends : Value Investing
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From: E_K_S9/1/2023 1:41:53 PM
  Read Replies (1) of 78481
 
A new Value proposition: Futurefuel Corp (FF)

Started a 0.1% portfolio position; so it's small but a good addition to my other larger chemical manufacturer positions in PSX & HUN

Similar PE as PSX at 7,4x; HUN PE at 24x

FutureFuel Chemical Company manufacturers diversified chemical products and biobased products comprised of biofuels and biobased specialty chemical products. The Biofuel product segment is focused on the production and commercialization of biodiesel while products offered by the chemical business segment mainly includes bleach activator, herbicide and performance chemicals. FutureFuel Chemical Company is based in Arkansas, USA.
No Debt; 7.4x PE; 4.25% Dividend; selling at 1.09x BV



I followed Richard into this one from Speculating In Takeover Targets

I like their chemical division and expanding margins; I own a few chemical companies in PSX, HUN and others and at this point in the cycle (as long as no recession) could see a good run in EPS.

The kicker is FF receives RIN = renewable identification numbers, which are government credits generated each time a gallon of renewable fuel is produced by a company like FutureFuel; Those credits were sold in July and did not hit Q2 earnings (reason for the big miss).

Management noted, however, that because these RINs were sold in July, after the end of Q2 they will add $19.5 million to the company's Q3 results.



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