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To: Glenn D. Rudolph who wrote (87367)	12/14/1999 12:59:00 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Glenn, here's a stock that's been out of favor that I've been buying this last week.(Soi) Heaven forbid! It's not a tech stock, and unfortunately makes profits. But at 14 what's the risk? Next year, value stocks should be back in favor. << New York, Dec. 6 (Bloomberg) -- The following remarks were made by Solutia Inc. Chairman, President and Chief Executive John Hunter III in an interview in New York. ``Since the spinoff (from Monsanto Co., in 1997), we've done everything we said we were going to do. We've cut costs and reduced debt, and we've repurchased shares. But there are several factors contributing to the (lower) share price: The industrial sector is currently not the most favored among investors; we're still relatively new and not widely known; and size and growth really do matter in the market these days. Investors would like to see more growth (in sales), and that's how we intend to build credibility.' Solutia shares have fallen about 30 percent this year, compared with a 12 percent rise for the Standard & Poor's Chemicals Index. ``We have a portfolio of businesses that's quite capable of showing growth. We intend to reach $5 billion in sales within three to four years, and most of that will come from existing businesses. Our Saflex and CPFilms businesses can double in size in that time, as can our resins and additives. We'll also be looking at modest bolt-on acquisitions, and we think there will be opportunities to add new businesses in electronic materials, pharmaceutical intermediates and aviation services.' ``We believe we can have operating margins of 15 percent at a minimum and sales of $5 billion, That really drives value for shareholders, and we want to do that as rapidly as possible.' On mergers and the possibility of a management buyout: ``A merger with a bigger chemical company is a possibility for just about every company in the chemical industry, but right now we really don't see a hand-in-glove fit out there as far as a so-called merger of equals.' ``The jury is still out on what kind of value will be created among a lot of the mergers we've seen in the industry lately. We're more than willing to have conversations with other companies and we're open to all possibilities, but the question is what happens after the merger? We don't want to just get big for the sake of being big. It has to be profitable growth.' ``As far as the possibility of a management buyout of some sort, it's incumbent upon any management to look at all the options, and that has to be on the radar screen. But it's not the preferred option because it would slow down some of the things we need to do with our portfolio (of businesses). The leverage would restrict our freedom.' On fourth-quarter earnings: ``We don't have a lot of exposure to foreign currencies, so we won't have a big impact from recent movements in the Euro and yen. ``We face the same raw-materials costs pressures as everyone else in the industry. We're raising prices for products, but there's a lag between cost and price increases, so we'll be a little bit squeezed in the fourth quarter. We remain comfortable with the range of earnings estimates though.' St. Louis-based Solutia is expected to earn between 42 cents and 55 cents a share in the fourth quarter, according to a First Call Corp. survey of analysts. The average estimate was 48 cents. On share repurchases: At these prices share repurchases provide a good return, but ultimately that's not how you drive value. We will continue to walk right down the middle, buying back shares as well as expanding our businesses and investing in the company.'>>