OEC - Long Orion Engineered Carbons: 27% FCFF Yield In 3 Years At The Cusp Of Pricing Upcycle

Summary

I recommend buying the common shares of Orion Engineered Carbon (NYSE: OEC) at current price of $16.40. Stock has been smashed in the past year by a nasty concoction of auto end-market downturn, opaque pass-thru contracts and environmental compliance costs . However, a persistent, unprecedented tight rubber black industry and strong fundamentals in specialty black mean that there is a multi-year pricing story, overshadowed by near-term cyclical factors. The pricing power is further masked by annual contracts that are only re-priced once each year, hiding the extent to which pricing can hike. This