Top 5 Chemical Companies To Own For 2014

Since today�� specialty chemicals industry supplies most finished goods manufacturers, the economic and consumer recession had a direct impact on this particular industry�� results since the end of 2009. Eastman Chemical Company (EMN) wasn�� the exception. The firm has made an emphasis on its acetate tow production, mainly used for cigarettes. The company stands out for using coal as its input, in contrast with other competitors using petroleum and gas, both more expensive for production. This mark up has allowed Eastman to transfer some of its increasing costs onto prices, �without compromising its sales revenue.

In addition to this, the acquisition of Solutia Inc. (former global leader in performance materials) completed on July 2, 2012, broadened Eastman�� specialty chemicals output by adding automotive and solar end products to its portfolio.

Although Eastman is a highly diversified company, it has proven to be severely affected by negative cycles of the economy. Even though this feature is not appealing whatsoever to investments, it certainly has caused it to become a cheap alternative. And, a quite promising one, since the economic recovery boosted its revenue, as a result of Eastman�� focus on cost-advantage production methods.

Best Biotech Stocks To Own Right Now: Stepan Co (SCL)

Stepan Company, incorporated on February 19, 1959, produces specialty and intermediate chemicals, which are sold to other manufacturers and then made into a variety of end products. The Company serves principal markets, such as manufacturers of cleaning and washing compounds (including detergents, shampoos, fabric softeners, toothpastes and household cleaners), paints, cosmetics, food and beverages, agricultural products, plastics, furniture, automotive equipment, insulation and refrigeration. The Company has three segments: surfactants, polymers and specialty products. The Company operates in the geographical regions of North America, Europe, Latin America and Asia. As of December 31, 2012, the Surfactants segment accounted to 72%, Polymers segment accounted to 24% and Specialty segment accounted to 4% of the Company�� revenues. On March 22, 2012, the Company increased its controlling interest in Stepan Philippines Inc from 89% to 100%.

Surfactants

Surfactants are used in a variety of consumer and industrial cleaning compounds as well as in agricultural products, lubricating ingredients, biodiesel and other specialized applications. The Surfactants are principal ingredients in consumer and industrial cleaning products, such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos, body washes, toothpastes and fabric softeners. Surfactants are manufactured at six North American sites (five in the United States and one in Canada), three European sites (United Kingdom, France and Germany), and three Latin American sites (Mexico, Brazil and Colombia), and one Asian site (Philippines and Singapore). The Company also holds a 50% ownership interest in a joint venture, TIORCO, LLC (TIORCO), that markets chemical solutions for increasing the production of crude oil and natural gas from existing fields.

Polymers

Polymers generate its revenues primarily from the sale of polyols and phthalic anhydride used in plastics, buildi! ng materials and refrigeration systems. It includes two primary product lines: polyols and phthalic anhydride. Polyols are used in the manufacture of rigid laminate insulation board for thermal insulation in the construction industry. Polyols are also a base raw material for flexible foams, coatings, adhesives, sealants and elastomers.

Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, phthalic anhydride is used internally in the production of polyols. In the United States, polymer product lines are manufactured at the Company�� Millsdale, Illinois, site. In Europe, polyols are manufactured at the Company�� subsidiaries in Germany and Poland. In Asia, polyols are produced at the Company�� 80% owned joint venture in Nanjing, China.

Specialty Products

Specialty products are used in food, flavoring and pharmaceutical applications. It includes flavors, emulsifiers and solubilizers used in the food and pharmaceutical industries. Specialty products are primarily manufactured at the Company�� Maywood, New Jersey, site.

Advisors' Opinion:

• [By Marc Bastow]

  Specialty chemical maker Stepan (SCL) raised its quarterly dividend 6% to 17 cents per share, payable on Dec. 13 to shareholders of record as of Nov. 29. This marks the 46th consecutive annual dividend increase.
  SCL Dividend Yield: 1.13%

• [By Seth Jayson]

  Basic guidelines
  In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Stepan (NYSE: SCL  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Stepan doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue decreased 4.8%, and inventory increased 30.6%. Comparing the latest quarter to the prior-year quarter, the story looks potentially problematic. Revenue dropped 1.9%, and inventory grew 30.6%. Over the sequential quarterly period, the trend looks OK but not great. Revenue grew 6.9%, and inventory grew 9.5%.

• [By Monica Gerson]

  Stepan Company (NYSE: SCL) is expected to report its Q3 earnings at $0.93 per share on revenue of $467.40 million.

  Lennox International (NYSE: LII) is projected to report its Q3 earnings at $1.28 per share on revenue of $877.87 million.

Top 5 Chemical Companies To Own For 2014: American Vanguard Corp (AVD)

American Vanguard Corporation, incorporated on January 2, 1969, operates as a holding company. The Company is primarily a chemical manufacturer that develops and markets products for agricultural and commercial uses. The Company manufactures and formulates chemicals for crops, human and animal protection. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC de Costa Rica Sociedad Anonima (AMVAC CR), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC Chemical UK Ltd. (AMVAC UK), AMVAC CV (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), and Envance Technologies, LLC (Envance). In July 2012, the Company completed the restructuring of the International Sales & Marketing function of its principal operating subsidiary, AMVAC Chemical Corporation. On November 30, 2012, AMVAC and TyraTech, Inc. formed Envance Technologies, LLC, in which the Company owns 60% of the equity interest. In July 2012, the Company formed AMVAC CV and AMVAC BV.

AMVAC is a chemical manufacturer that develops and markets products for agricultural and commercial uses. It manufactures and formulates chemicals for crops, human and animal health protection. These chemicals, which include insecticides, fungicides, herbicides, molluscicides, growth regulators, and soil fumigants, are marketed in liquid, powder, and granular forms. AMVAC owns and/or operates the Company�� domestic manufacturing facilities and is also the parent company for all its foreign companies. DAVIE owns real estate for corporate use.

GemChem is a national chemical distributor. GemChem, in addition to purchasing key raw materials for the Company, also sells into the pharmaceutical, cosmetic and nutritional markets. GemChem is a wholly owned subsidiary of AVD.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on American Vanguard (NYSE: AVD  ) , whose recent revenue and earnings are plotted below.

Top 5 Chemical Companies To Own For 2014: Calgon Carbon Corp (CCC)

Calgon Carbon Corporation is a provider of products, services, and solutions for purifying water and air. The Company operates in three reportable segments: Activated Carbon and Service, Equipment, and Consumer. The Activated Carbon and Service segment manufactures granular and powdered activated carbon for use in applications to primarily remove organic compounds from water, air and other liquids and gases. The service aspect of the segment consists of reactivation and the leasing, monitoring and maintenance of carbon adsorption equipment. The Equipment segment provides solutions to customers��air and water purification problems through the design, fabrication, installation, and sale of equipment systems that utilize a combination of the Company�� enabling technologies: carbon adsorption, ultraviolet light (UV), Ballast Water Treatment (BWT), and advanced ion exchange separation (ISEP). The Consumer segment primarily consists of the manufacture and sale of carbon cloth. On March 31, 2011 the Company completed the acquisition of Calgon Carbon Japan KK (CCJ).

Activated Carbon and Service

The sale of activated carbon is the principle component of the Activated Carbon and Service business segment. Activated carbon is a porous material that removes organic compounds from liquids and gases by a process known as adsorption. In adsorption, unwanted organic molecules contained in a liquid or gas are attracted and bound to the surface of the pores of the activated carbon as the liquid or gas is passed through. The primary raw material used in the production of the Company�� activated carbons is bituminous coal which is crushed, sized and then processed in low temperature kilns followed by high temperature furnaces. The Company also markets activated carbons from other raw materials, including coconut shell and wood. The Company produces and sells a range of activated, impregnated or acid washed carbons in granular, powdered or pellet form. Granular activated carbon (GAC) particl! es are irregular in shape and generally used in fixed filter beds for continuous flow purification processes.

Another component of the Activated Carbon and Service business segment are the optional services associated with supplying the Company�� products and systems required for purification, separation, concentration, taste and odor control. The Company offers a variety of treatment services at customer facilities, including carbon supply, equipment leasing, installation and demobilization, transportation and spent carbon reactivation. Other services include feasibility testing, process design, performance monitoring and maintenance of Company-owned equipment. The central component of the Company�� service business is reactivation of spent carbon and re-supply. The Company provides reactivation/recycling services in packages ranging from a 55 gallon drum to truckload quantities.

Equipment

Along with providing activated carbon products, the Company has developed a portfolio of standardized, pre-engineered, adsorption systems capable of treating liquid flows from 1 gallons per minute to 1,400 gallons per minute, which can be delivered and installed at treatment sites. These self-contained adsorption systems are used for vapor phase applications, such as volatile organic compound (VOC) control, air stripper off-gases, and landfill gas emissions. Liquid phase equipment systems are used for applications of potable water, process purification, wastewater treatment, groundwater remediation and de-chlorination. The Company produces a range of odor control equipment, which typically utilizes catalytic activated carbon to control odors at municipal wastewater treatment facilities and pumping stations. The Company�� variety of equipment systems treats the odors that emanate from municipal wastewater treatment facilities and the sewage collection systems that bring the waste to the treatment plant.

The ISEP (Ionic Separator) continuous ion exchange units ! are used ! for the purification and recovery of many products in the food, pharmaceutical, and biotechnology industries. The ISEP Continuous Separator units perform ion exchange separations using countercurrent processing. The ISEP and CSEP (chromatographic separator) systems are used at over 300 installations worldwide in more than 40 applications in industrial settings, as well as in environmental applications, including perchlorate and nitrate removal from drinking water. The Hyde GUARDIAN System was developed as a chemical-free, International Maritime Organization (IMO) type approved, ballast water management solution. The system is designed to meet the needs of ship owners to install treatment system.

Consumer

The primary product offered in the Consumer segment is carbon cloth. Carbon cloth, which is activated carbon in cloth form, is manufactured in the United Kingdom and sold to the medical, military, and specialty markets. Zorflex Activated Carbon Cloth can be used in numerous additional applications, including sensor protection; filters for ostomy bags; wound dressings; conservation of artifacts, and respiratory masks.

The Company competes with Norit, N.V., Mead/Westvaco Corporation, Siemens Water Technologies, Trojan Technologies, Inc., Xylem, Wedeco Ideal Horizons, Panasia, Alfa Lavel Tumba AB, Hyde Marine, Inc. and Wartsila.

Advisors' Opinion:

• [By Inyoung Hwang]

  Computacenter Plc (CCC) slipped 4.5 percent to 543 pence, its biggest drop since June. UBS AG lowered the technology-services provider to neutral from buy, citing its valuation. The shares have climbed to 13.18 times estimated earnings from 11.81 times at the end of last year, according to data compiled by Bloomberg.

• [By Aaron Levitt]

  Calgon Carbon Corporation (CCC) is one of the largest manufacturers of activated carbon and filtration systems in the world, with activated carbon capacity of around 75,000 tons per year. That�� a good position to be in, as carbon filters are some of the most effective methods at removing chlorine, sediment and other volatile organic compounds from wastewater. They are also one of the cheapest methods for utilities to implement.

Top 5 Chemical Companies To Own For 2014: National Oxygen Ltd (NOL)

National Oxygen Limited (NOL) is an India-based company, which is a producer and supplier of industrial gases both in liquid and gaseous forms to industries and hospitals. Its products include oxygen, nitrogen and acetylene. The Company operates in two segments: Industrial Gases, which is engaged in the manufacture of industrial gases, and Windmill, which is engaged in the generation of windmill energy. During the fiscal year ended March 31, 2012 (fiscal 2012), the Company produced 51,07,981 cubic meters of oxygen, 52,138 cubic meters of dissolved acetylene, 30,69,610 cubic meters of nitrogen and 26,86,762 kilowatt hours of windmill energy. It has two industrial gas plants in Tamil Nadu and Pondicherry, and one windmill in Maharashtra. During fiscal 2012, NOL had an installed capacity to produce 2,50,00,000 cubic meters of oxygen, 2,00,000 cubic meters of dissolved acetylene and 44,00,000 kilowatt hours of windmill energy. Advisors' Opinion:

• [By John Emerson]

  Another huge benefit which was imbedded in the value of RTEC was the tens of millions of net operating losses (NOL) that the company had accrued as a result of the massive accrual losses it would sustain during the credit crisis. These benefits were not reflected on the balance sheet but they would translate into tens of millions of dollars in income tax savings when the company eventually returned to profitability.