5 X-Men You Didn’t Know Were Other Mutants Offspring 1.0

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Dow Chemicals Follows in DuPont’s Footsteps, Spins Off Low-margin Assets

Dow Chemicals (DOW), the 115 year old American multinational chemical corporation giant, is planning to spin-off of its $4 billion chorine derivatives business. As a result of this divestiture, the company will essentially be getting out of a business it has been involved in for over one hundred years. The move is a part of an ongoing effort to prove to investors that the company has weaned itself away from concentrating on low-margin businesses towards focusing on high-margin, less cyclical businesses.

As Investors tend to look kindly upon companies that choose to sell or spin-off their underperforming assets, it comes as no surprise that Dow stock registered a stock price jump of 2.25% after the company announced divesting resources from its chlorine chain, which generates 9% of the company’s total revenues. The move is a sure signal that the company is increasingly focused on benefiting from patented products, which provide them with an opportunity to earn higher margins than their commodity chemicals businesses. DOW has already shed non-cores businesses which were generating $10 billion in revenue since 2009.

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Dupont Sell Side Expectations

Currently, 26 sell-side analysts are covering DuPont and their estimates for its share price lie within a range of $70 and $48. In its latest earnings release the company reiterated its EPS guidance for 4Q13 to 60 cents and FY13 earnings of $3.85. Analysts in general believe that DuPont’s future EPS and growth targets are heavily dependent upon a halt in the fall in titanium dioxide prices and stability in the farm economy.

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Dupont Industry Analysis

DuPont operates in the Materials sector, as classified under the Global Industrial Classification System. Although DuPont has businesses in a number of industries due to its diverse portfolio but as it generates the bulk of its revenues from the chemicals related business it is categorized under the Chemicals industry.  Read More : DuPont (DD)

Byron Harris, News 8 Investigates win prestigious duPont Award

WFAA senior investigative reporter Byron Harris and his team received an Alfred I. duPont-Columbia University Award for a two-year-long investigation exposing hundreds of millions of dollars in questionable spending on Medicaid dental care.

Columbia University’s Graduate School of Journalism announced 14 silver baton awards Wednesday, with other honors also going to ESPN, The Center for Investigative Reporting, NBC and CBS news, among others. The duPont is considered the broadcast equivalent of print journalism’s Pulitzer Prize, which is also awarded by Columbia University.

Below is what Columbia wrote about the series:

"WFAA’s reporting, “Denticaid: Medicaid Dental Abuse in Texas,” focused on rampant overbilling by dentists targeting children and families receiving Medicaid. One clinic, WFAA found, solicited minors off the streets of Dallas using cash and other incentives and performed extensive and often harmful dental work on them –- all without their parents’ permission. Read More : Dupont (DD)

Dupont Company Description

E.I. Du Pont De Nemours and Company started operations in 1802. DuPont is part of the Diversified Chemicals sub-industry and provides materials and services through 13 businesses which are aggregated and classified as eight business segments – Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials, Safety & Protection and Pharmaceuticals. In FY12, DuPont earned revenues of $34.8 billion, an improvement of 3.4% year-over-year. DuPont earns 59% of its revenues from outside North America. The Agriculture segment is DuPont’s largest segment by revenues, generating 30% of the total. The Nutrition & Health Segment is the fastest growing segment with a three-year revenue CAGR of 41%. Read More: DD

DuPont Is No Longer Your Father's Paint Company

E. I. DuPont de Nemours and Company (DD) has been transforming over the past few years and will continue its transformation in the foreseeable future. DuPont is changing its identity as a chemical conglomerate to a food and agriculture company. Despite positioning the company to benefit from secular growth trends, it changes the character of the business. 

In essence, management is moving the company away from being a sleepy chemical play to a research driven growth company. As a result of this effort, management has been making acquisitions in the food and agriculture industry and selling more capital intensive and cyclical businesses such as the Performance Coating business. Yet, despite the stock being up 30% year-to-date, the stock still represents an asymmetric risk vs. return opportunity. Read More : DuPont