AI driven 10Q / 10K text analysis
Since there are always reasons when companies change the wording in their financial filings, being alerted to these changes allows investors to realise potential risk factors and opportunities before they are reflected in the market. Recent alerts include: 1) Akamai - ongoing competition, pricing pressure, DIY, alternative sourcing strategies. 2) Align - increased competition? Customs investigations? 3) Arista Networks - more benign competitive and market conditions. 4) Bruker - covenant concerns. 5) Celanese - greater than usual year-end destocking in Q4. 6) Jazz Pharmaceuticals - caution on ability to maintain or increase sales.
Edition: 224
- 14 November, 2025
Chemicals: Is the worst behind us?
Materials
Frank Mitsch sees early signs of stabilisation in the chemicals sector, despite short interest sitting at 52-week (or longer) highs and persistent investor concerns around potential dividend cuts. While he remains cautious on Tronox and Huntsman’s payouts, he considers dividends from Dow and LyondellBasell to be safe. Roughly 60% of 1Q results landed within 4% of his expectations, with Olin, Corteva, FMC and Celanese leading on beats vs. the Street. Westlake was the notable miss, due to underperformance in its PEM segment, partly from unplanned downtime. After over two years of sector underperformance, exacerbated by the overreaction to Liberation Day, Frank believes the worst may be behind us; hence his recent upgrades (to Buy) on DOW, LYB and PPG. He has also been heartened by how the credit markets have been open to companies such as CE and OLN.
Edition: 212
- 30 May, 2025
Materials
Cheap valuation and manageable debt load - Hassan Ahmed upgrades the stock to Overweight. CE’s high exposure to the Chinese / European economies and to the auto and construction / housing end markets provides an earnings growth tailwind going forward. Germany's new €500bn infrastructure fund also serves as an upside catalyst for earnings. Re. the group's bloated debt position, Hassan notes that if CE were to hit a quarterly run rate EPS of $2.00+ per share it could generate ~$1.3bn in FCF annually and be able to organically take care of its debt payments. While not his base case, the company could raise as much as $1.5bn by selling its acetate tow business.
Edition: 207
- 21 March, 2025
Bear’s Den Idea Forum
Several ideas presented at MYST’s latest buy-side event focused on “misguided acquisitions”...
Carvana (CVNA) - Overpaying for “mediocre ADESA asset” increases balance sheet risk as competition intensifies (35% downside).
Celanese (CE) - “Massively overearning” in Acetic Acid segment; DuPont M&M deal increases leverage / cyclicality (30% downside).
Synaptics (SYNA) - Expensive roll-up of low-quality semiconductor assets at cyclical peak (45% downside).
Edition: 132
- 01 April, 2022
US Chemicals: Expect a Strong Q3 21 and 2021
Materials
Current consensus expectations for the sector in Q3 still seem tepid, keeping in mind product margin gains and pricing strength. It is highly possible that companies under coverage will experience positive earnings revisions throughout 2021. Covestro AG, TP $73 (~25% upside); Chemours Company, TP $46 (~50% upside); Celanese Corp., TP $200 (~25% upside); Dow Inc, TP $85 (~45% upside)
Edition: 121
- 15 October, 2021