Chemical Cannibal Trading at an ATL of P/TB 0.48x, Potential M&A Target and Positioned for Operational Rebound

29 days ago

"ASIX is a dismissed stock. There is no cheery consensus in this stock. It is an “icky” stock. But we think that there are tangible assets on a strong balance sheet as downside protection. What might happen, on the upside, is very hard to predict. But the fundamental building blocks for a successful turnaround are in place. We estimate that the potential upside is 2-3x from these levels and the downside scenario appears manageable. We’ll leave by giving Walter Schloss the last words:"

AdvanSix (ASIX) is dismissed by the stock market . The stock trades at $14.40, -57% from one-year-high. The P/TB multiple of 0.48x is uniquely low. The share has only traded below 0.65x TB during 0.3% of the trading days since the spin-off from Honeywell in 2016. At the same time, ASIX is backed by assets . It operates five highly specialized chemical plants, most held for decades, with replacement costs likely far above book value. These assets have historically delivered an average EBIT margin

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