Posted on June 27, 2022
Dow Inc. (NYSE:DOW) is a dues-paying member of the Dow Jones 30 Industrial Average and the Fortune 500.
So she’s got a reputation to look after.
Maybe that’s why the company’s literature speaks incessantly about “sustainability” and “decarbonization” and “biodiversity” while, of course, the operation itself produces some of the most caustic and toxic pollutants on the planet.
It may also explain why they’ve dropped entirely the ‘chemicals’ label from their company description, preferring the more palatable 21st century moniker: ‘provider of materials science solutions’.
We live in a world where words no longer have any meaning – so it fits.
Indeed, now that we think of it, maybe investors got fed up with the company’s euphemisms and doublespeak, and gave the stock an oyster-shuck over the last ten sessions that sent it cascading lower by more than 25% in the most exquisite rendition of Niagara Falls we’ve seen in the market all year.
Just wait ‘til you see the chart…
That said, DOW now boasts one of the finest free cash flow and dividend yields in the market, putting it among the few go-to stocks for value hunters now in search of a buy.
We are not yet calling it a BUY, however, though we believe an interesting trade can be whittled from it on account of its unique fundamentals and a current option pricing anomaly.
It’s a SPECULATIVE trade that could bag us a healthy 3233% return.
But more on that in a moment.
We’re examining fundamentals now, and, by golly, it’s been years since we’ve seen the likes of these.
Check them out –
We actually like the fact that the last five earnings reports on the company have been DOWNGRADES, including from Credit Suisse, Citicorp and Piper Sandler.
It’s a good sign because analysts are almost always behind the curve. That is, they’re chasing price, offering buy ratings at tops and sells at bottoms.
All five reports were delivered in the last 30 days.
When the story’s ultimately written on the chemical industry, there won’t be a lot to say.
The number that will hang for knowingly poisoning the masses will be legion.
And history, unfortunately, has a way of losing count when the numbers get that big.
May the G-d of Israel protect you and yours from the toxins that envelop us.
With kind regards,
Hugh L. O’Haynew