Is now good time to buy chemtrade

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Good morning. Just looking at a few different plays, chemtrade being one of them. The dividend is very attractive if sustainable and would seem to have a lot of upside. Could I get your thoughts on this. thanks

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Asked on October 14, 2022 9:33 am
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This isn't a company that I would be looking at in particular. It fails almost every pre-screen element I look for. revenue and earnings have been relatively flat over a decade long time period, it has negative return on equity and invested capital. Highly indebted with a debt to equity of 2.3x.

The company is definitely "cheap". It's trading at only 4.2x free cash flow which is nearly a 50% discount to its historical averages. However, revenue and earnings are expected to continue to shrink in the coming years.

It's been somewhat of a yield trap for the last 5+ years. Personally, it's not my cup of tea.

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Posted by Dan Kent
Answered on October 17, 2022 8:06 am