2024-02-06 20:54:50 ET
Summary
- Olin shares have underperformed, losing about 20% of their value in the past year.
- Concerns about management's credibility persist, given the lack of a permanent CEO, which makes the outlook and guidance uncertain.
- Olin's business is highly cyclical and heavily dependent on Chinese construction activity, which poses risks given ongoing challenges there.
Shares of Olin ( OLN ) have been a meaningful underperforming over the past year, losing about 20% of their value. Since rating shares a hold in October , they have largely tread water, rising just 3% vs a 13% gain in the S&P 500. At the company’s 2024 guidance, it does have a forward free cash flow yield of nearly 9%, which is certainly not expensive. That said, my caution on OLN has been driven in part by a lack of confidence in management, and these significant concerns persist, which leave me on the sidelines....
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Olin: Too Much Uncertainty To Be Bullish