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 Albemarle Corp. (NYSE: ALB) is a developer, manufacturer and
marketer of highly-engineered specialty chemicals. The specialty products
enhance the value of customers’ end-products by improving performance, providing
essential product attributes, lowering cost and simplifying processing. The
products are sold to a wide range of customers, including manufacturers of
electronics, building and construction materials, automotive parts, packaging, pharmachemicals, agrichemicals and to petroleum refiners.
Albemarle operates under three business segments:
Polymer Additives, Catalysts and Fine Chemicals. The Polymer Additives segment
consists of two product categories: flame retardants and stabilizers and
curatives. The Catalysts segment includes refinery catalysts and polyolefin
catalysts. The Fine Chemicals segment consists of two product
categories: performance chemicals and fine chemistry services and intermediates.
The Stock's price gained
27.8% over the past 3 months; 37.7% over the past 6
months; and 77.7% over the past 12 months.
Albemarle is classified as a mid-cap value company.
The Company has a market capitalization of $3,136.79 million. The Company
was incorporated in Virginia in 1993.
Albemarle's principal executive office is
located in Richmond, Virginia. The company has 3,700
employees.
Sector: Basic Materials; Industry: Chemicals - Plastic &
Rubber; Ticker: ALB; Exch:
NYSE;
11/10/06 Closing Price:
$66.06)
STOCK GRADE (ASG): 45.95 (GOOD)
BUSINESS & FINANCIAL SUMMARY
(Yahoo)
EXPANDED BUSINESS DESCRIPTION
(Reuters)
STOCK INFO/RESEARCH
(MSN)
OWNERSHIP
(MSN)
KEY DEVELOPMENTS
(MSN),
RECENT NEWS
(MSN) &
HEADLINES (Yahoo)
HISTORICAL PRICES (Yahoo)
&
PRICE CHART
(IQChart)
RISK LEVEL
(Reuters)
COMPANY'S WEB SITE
STOCK'S CORE
STRENGTHS (SEE: Table Below)
| Management's Effectiveness (12 Mo.) |
. . . |
Return on Equity: |
11.52% |
| Profitability (12 Mo.) |
. . . |
Profit Margin: |
5.22% |
| Stock's Growth Record (12 Mo.) |
. . . |
Revenue: |
39.22% |
|
. . . |
EPS: |
87.86% |
|
. . . |
Price: |
50.27% |
|
. . . |
Dividend: |
NA |
| PE & EPS (12 Mo.) |
. . . |
Price/Earnings: |
28.46 |
|
. . . |
Earnings/Share: |
2.32 |
| Price
/ Share (Pick Date Closing Price) |
. . . |
Pick Date 11/10/2006: |
$66.06 |
| Price
/ Share (Current) |
. . . |
Current Price |
Quote |
ALBEMARLE CORP. -
EVALUATION
Albemarle's
stock emerged as an ACE'S selection based on the evaluation results of the
criteria listed below. The evaluation results are encapsulated as one value in
ASG (short for ACE'S Stock Grade). ASG
is a proprietary variable that was devised by ACE'S to measure the
quality of a stock for investment. Albemarle's ASG value of 45.95 is
VERY GOOD.
A. MANAGEMENTS EFFECTIVENESS - POOR
B. PRODUCTS & SERVICES, SET OF - GOOD
C. SALES - EXCELLENT
D. CASH FLOW, FREE - GOOD
E. PROFITABILITY -
GOOD
F. PRICE-EARNINGS RATIO (P/E) - POOR
G.
FINANCIAL HEALTH -
EXCELLENT
H.
MARKET CAPITALIZATION -
GOOD
I.
TRADED VOLUME -
AVERAGE
J.
PRICE GROWTH - EXCELLENT
A. MANAGEMENTS EFFECTIVENESS - POOR
How well a company performs
generally - in its
business operations, controlling costs, the success of its products and
services in the market place, profitability, and the like - depends on its
management's efficiency. Return on Equity ( ROE) is used by ACE'S as a general indication
of the company's efficiency.
Albemarle's ROE (ttm) of 11.6% is lower (by 3.33%) than the Industry's ROE of
12.0%; and lower (by 47.98%) than the S&P 500's ROE of 22.3%.
(Ref.:
MSN Finance\Key Ratios).
 ACE'S gives a preferential rating to a company that has a
comparable or relatively higher ROE than the Industry. ACE'S rating of
Albemarle's Management's Effectiveness: POOR (LOWER THAN INDUSTRY'S AVERAGE).
^ Back to Evaluation
B. PRODUCTS & SERVICES - EXCELLENT
Products and services are the elements that enables a company to have a presence
in its target market and generate sales. The set of products and services that a company has and how successful those products and services performs in the
target market are very important factors in considering a company's stock for
investment.
Albemarle's core business products: Polymer Additives, Catalysts and Fine
Chemicals.
 POLYMER
ADDITIVES
Comprised of the following product categories: flame retardants, curing
agents and antioxidants. Plastics compounders and polymer manufacturers use
these products to add life-saving properties to resins used in electronics,
appliances and furnishings; extend the useful life and improve the
processability of their polymers, lubricants and fuels; and to increase the
value of their chemical output or unlock new applications for their own
products.
-
Flame retardants. Help materials in a wide variety of finished products meet
fire-safety requirements. Some of the
products that benefit from
Albemarle's flame retardants include plastic enclosures for consumer
electronics, printed circuit boards, wire and cable, electrical connectors, foam
seating in furniture and automobiles and textiles.
-
Antioxidants. The line of fuel and lubricant antioxidants are used by
refiners and fuel marketers to extend fuel storage life and protect fuel
systems, and by oil marketers and lubricant manufacturers to extend the useful
life of lubricating oils, fluids and greases used in engines and various types
of machinery.
-
Curing agents. These agents are used for polyurethane and epoxy system
polymerization, as well as for ultraviolet curing of various inks and coatings;
in cast elastomers, coatings, reaction injection molding (RIM) and specialty
adhesives that are incorporated into products such as wheels, tires and rollers.
-
Stabilizers.
These are the organic and inorganic tin intermediates that are used as a key raw material in
the production of tin based PVC heat
stabilizers. Tin stabilizers are used in the processing of rigid (pipe, window
profiles, siding, fencing) and some flexible
(packaging) PVC applications. PVC heat stabilizers help prevent the thermal
degradation of PVC resins during periods of
elevated temperature exposure, such as during processing, and help extend the
useful life of finished products.
CATALYSTS
These are products, technologies and related services for the petroleum refining
and chemical industries.
Comprised of the following product categories: FCC, HPC, polyolefins and
specialty catalysts.
- FCC
catalysts. These (fluidized catalytic cracking) catalysts assist in the
cracking of petroleum streams into derivative, higher-value products such as
fuels and petrochemical feedstock. The FCC additives are used to remove sulfur
in gasoline and to reduce emissions of sulfur dioxide and nitrogen oxide in FCC
units, to increase LPG olefins yield and to boost octane in gasoline.
- HPC
catalysts. These (hydroprocessing) catalysts are primarily used to reduce
the quantity of sulfur and other impurities in petroleum products as well as to
convert heavy feedstock into lighter, more valuable products.
-
Polyolefins. These are aluminum- and magnesium-alkyls, which are used as
co-catalysts in the production of
polyolefins, such as polypropylene and polyethylene used in plastic products,
elastomers, alpha olefins, such as hexene,
octene and decene, and organotin heat stabilizers and in the preparation of
organic intermediates.
-
Specialty catalysts. These are a variety of high quality specialty
catalysts, for refinery and petrochemical applications.
FINE
CHEMICALS
Consists of performance chemicals and fine chemistry services and intermediates.
Performance chemicals include products
such as elemental bromine, alkyl bromides, inorganic bromides and a number of
bromine fine chemicals. These products
are used in chemical synthesis, oil and gas well drilling and completion fluids,
paper manufacturing, water purification, glass manufacturing, photography and
various other industrial applications. These products are sold to customers
throughout the world for use in personal care products, automotive insulation,
foundry bricks and other industrial products.
-
Fine chemistry services. Comprised of product development services at every
stage, from contract research, process development and the pilot plant right
through commercial-scale manufacturing.
-
Pharmaceuticals. These are bulk active pharmaceutical ingredients (APIs)
which are used as the cornerstone of many formulations of today's best-known
brands of ethical and over-the-counter analgesics and anesthetics. APIs will be
a key component in
Albemarle's focus in the increasing generic market, high-valued,
complicated, multiple-step APIs served via injectable, oral or other delivery
systems.
-
Bromine chemicals. Bromine is a basic building block in many agricultural
chemicals, pharmaceutical intermediates, and rubber compounds. Albemarle
supplies the bromine required for many popular oilfield completion and workover
chemicals. Albemarle also supplies several bromine-based biocides and quaternary
ammonium compounds for recreational and industrial water treatment applications.
-
Other industrial specialties. These are a multitude of products that are
used by customers to raise the value they bring to the market: photographic
chemicals and films to cathode ray tubes, crystal and optical glass utilize
potassium and chlorine chemicals; specialty oxides - provide high quality
special aluminum oxides to various industries; other industrial specialty
products that are widely used as pigments, fillers and processing aids for paper
manufacturing as well as abrasives in industrial and consumer polishing
applications, and as fillers in brake linings and paints and varnishes.
ACE'S
gives a preferential rating to a company who have
a variety of product
and services that have present and continued utility in a broad and
dynamic market.
An estimation of the latter products' utility, distinctive qualities and competitiveness would be subjective assessments.
However, there is one objective data that indicates how well the subjective
elements of Albemarle's products and services
are assessed and used by its target market - the company's
sales.
ACE'S rating of
Albemarle's line-up of Products & Services: EXCELLENT
^ Back to Evaluation
C. SALES - EXCELLENT
Sales is an important indicator on how a company's products and services
performs in its target market. Generally, a high sales figure is preferred than a lower figure.
Also, a steady and appreciable growth in a company's total sales from one year to the next is a key indicator on how a
company is able (or unable) to sustain and improve the utility of its products and services in the marketplace.
Albemarle's annual revenue was $942.75M in 12/2001, $1,007.92M in 12/2002, $1,110.24
in 12/2003,
$1,513.74M in 12/2004 and $2,107.50M in 12/2005. Relative to 12/2001's revenue, the
Company's sales increased 6.91% in 2002; 17.77% in2003; 60.57% in 2004 and
123.55% in 2005,
(Ref.:
MSN Money\Financials).
Albemarle's ttm annual sales of $2,372.10M was 133.04% higher than the Industry's
sales of $1,017.90M.
Albemarle's ttm Sales growth rate of 17.40% was 7.20% points higher than the
Industry's rate of 10.20%.
(Ref.:
MSN Money\Research).
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a high and progressively increasing level of sales from year-to-year. Albemarle's
year-to-year annual revenues have progressively increased
from 2001 to 2005. ACE'S rating of
Albemarle's Sales Growth Rate: EXCELLENT.
^ Back to Evaluation
D. CASH FLOW, FREE - GOOD
Cash flow is crucial to the operation and survival of companies. A company
having ample ready cash ensures that creditors, employees, and others can be
paid on time.
Cash flow could be considered as a better measure of a business's profitability
than earnings, because a company can show positive net earnings and have insufficient cash flow (that is, the company
is not able to pay its debts). Cash Flow
thus can be used as an indicator of a company's financial strength.
Albemarle's cash flow during the past 5 years: $143.86M in 12/2001;
$144.77M in 12/2002; $150.10M in 12/2003; $191.56M in 12/2004; and
$168.86M in
12/2005. Relative to 12/2001, the Company's cash flow increased 0.63% in
2002, 4.34% in2003, 33.16% in 2004, and 17.38% in 2005.
(Ref.:
MSN Money\Financials).
ACE'S
gives a preferential rating to a company that have demonstrated the ability to
sustain a positive and appreciable cash flow from year-to-year. Albemarle's
year-to-year cash flow have an average annual increase of 13.88% from 2001 to 2005. ACE'S rating of
Albemarle's Cash Flow: GOOD.
^ Back to Evaluation
E. PROFITABILITY - GOOD
Making a profit is the ultimate goal of every company. A useful gauge of a
company's profitability is its net income (also referred to as "earnings"). Related to a company's outstanding shares of common stocks, the company's total earnings is transformed
to "earnings per share" (or "EPS" for short). EPS is a very popular indicator of a company's profitability and a
powerful variable that influences the price of a company's stock.
Albemarle's annual Net Income, for the past 12 months, of $112.20M is
85.15% higher than the
Industry's Income of $60.60M)
(Refs.
MSN Money\Financials\Statements).
For the past 5 years, Albemarle's annual
Net Income are: $68.00M in 12/2001; $73.02M in 12/2002; $71.95M in 12/2003; $54.84M
in 12/2004; and $114.87M in 12/2005. Relative to 12/2001, the Company's net
income increased 7.38% in 2002, 5.81% in2003, 65.00% in 2004 and
68.93% in
2005; or an average year-to-year increase of 36.78%.
(Refs.
MSN Money\Financials\Statements)
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a positive, appreciable and increasing net income. Albemarle's
average year-to-year increase of 36.78% from 2001 to 2005. ACE'S rating of Albemarle's Profitability:
GOOD.
^ Back to Evaluation
F. PRICE-EARNINGS RATIO (P/E) - POOR (HIGHER THAN
INDUSTRY'S AVERAGE)
A stock's Price-Earnings ratio tells us roughly how much investors are willing
to pay per dollar of earnings. Price-Earnings
is a ratio of a company's current share price compared to its per-share
earnings. The P/E ratio is a much better indicator
of the value of a stock than the market price alone.
In general, a high P/E means high projected earnings in the future. As such, the
P/E ratio could be interpreted as the reflection of the market's optimism concerning a firm's growth prospects. To
determine whether a particular P/E is high
or low, take into account a company's growth rates; and the P/Es of other
companies in the same industry. Historically,
the average P/E ratio in the market has been around 15-25.
Albemarle has a P/E ratio of 27.46 (ttm) which is
4.93
points higher - or 21.88% more -
than the
Industry's P/E of 22.53 (ttm).
(Ref.: Yahoo! Finance\Competitors)
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower P/E than the Industry. ACE'S rating of
Albemarle's P/E Ratio: POOR (HIGHER THAN INDUSTRY'S AVERAGE).
^ Back to Evaluation
G. FINANCIAL HEALTH -
EXCELLENT (LOWER THAN INDUSTRY'S AVERAGE).
The assumption of debt, i.e., financial leverage, are used by companies to
finance its assets. The magnitude of the debt's expense component affects the company's net income.
A company with significantly more debt than equity is considered to be highly
leveraged. A popular measure of financial
leverage is the "debt/equity ratio". A higher debt/equity
ratio generally means that a company has been aggressive in financing its growth
with debt. This higher ratio can result
in volatile or negative earnings as a result of the additional interest expense.
Thus, the Debt/Equity Ratio is popularly used
as a measure of a company's financial health.
Albemarle's 0.76 Debt/Equity Ratio (latest 12 months) is 0.08% points (or
9.52%) less than
the Industry's Ratio of 0.84, and 0.46% points (or 37.71%) less than the S&P 500's Ratio 1.22.
(Refs.:
MSN Money\Ratios)
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower debt ratio than the Industry. ACE'S rating of
Albemarle's
Debt Ratio: EXCELLENT (LOWER THAN INDUSTRY'S AVERAGE).
^ Back to Evaluation
H. MARKET CAPITALIZATION - GOOD
Market Capitalization (or market cap for short) is a measure of a company's
size. The market cap provides a broad gauge
of the growth-versus-risk potential of a company. Historically, large caps have
experienced slower growth with lower
risk; whereas small caps have experienced higher growth potential, but with
higher risk.
The market cap of a company is calculated by multiplying the number of its
outstanding shares by the shares' current market price. There are presently six classes of Market Cap: Mega Cap, Big/Large
Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap. ACE'S assigns an
Excellent rating to Small Cap stocks; Good to Mid Caps; Average to Big/Large
Caps; and Below Average to Mega Caps. ACE'S excludes Micro
and Nano Caps in its stock picks.
Albemarleis classified as a mid cap company with a market
capitalization of $3,136.79M and with outstanding shares of
47.48M. (Ref.:
Reuters)
ACE'S gives a preferential rating to small and mid cap companies. ACE'S rating of
Albemarle's
Market Cap: GOOD.
^ Back to Evaluation
I. TRADED VOLUME - AVERAGE
A stock's price goes up or down based on the laws of supply and demand. Simply
stated, when a stock's price goes up, there must be significant buying demand
for the stock. Volume is the actual number of shares traded daily. Traded volume
could be used as a gauge of the demand for a stock.
Albemarlehas an 3-month Average Daily Volume of 385,714 shares; and
a 10-day Average Daily Volume of 373,422 shares.
(Refs.:
Yahoo! Finance\Statistics).
ACE'S assigns an Excellent rating for
+1,000,000 trading volumes; Good for 500,001-999,999 volumes; Average for
100,000 - 500,000 volumes; and Below Average for -100,000 volumes.
ACE'S gives a preferential rating to a company that sustains a
lively trade volume from week-to-week and month-to-month. ACE'S rating of
Albemarle's Traded
Volume: AVERAGE.
^ Back to Evaluation
J. PRICE GROWTH - EXCELLENT
Price growth is the 12-month increase in the price of a
stock (displayed as a percentage). As of 10/14/06, Albemarle had a 3-month growth
rate of 27.8% (vs. the Industry's 12.9% rate), a 6-month rate of 37.7% (vs.
the Industry's 3.2% rate), and a 12-month rate of 77.70% (vs. the
Industry's 23.0% rate).
(Refs.:
MSN Money\Research).
ACE'S gives a preferential rating to a company that have
demonstrated a solid capacity for high price growth and outperforming other
stocks in the Industry. ACE'S rating of
Albemarle's
Price Growth: EXCELLENT.
^ Back to Evaluation
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