C-MACC Sunday Recap 43
Trading Places – Taking Some Holiday Risk
- We expect commodity chemical companies – especially those that have not suffered storm related production outages – to have spectacular 4Q 2020s – well above current consensus and with greater upside surprises than other chemical sub-sectors. They may, or may not, offer bullish 2021 guidance.
- The commodity group has underperformed the other chemical sectors over the last 12 months, but the caveat is that the other sectors have kept pace with an S&P500 that is defining new PE highs – as are some of the other chemical groups. The commodity group has underperformed, has the strongest current per-unit margin and absolute earnings momentum. But is not cheap. What to do?
- In this Recap, we discuss recent sector developments and discuss some short- and medium-term investment ideas, providing a risk framework around each and potential steps to mitigate that risk. This is a little off-piste for us in a widely distributed report but not uncommon in one-on-one client discussions.
Last week we discussed 33 Chemical and related products and 97 Companies
This past Wednesday we introduced a new weekly research service dedicated to the coverage of Climate, Renewable, Energy Transition and ESG subjects – this is an area of the market that we have written about extensively this year [see Link here and highlights below] and where we see momentum building during the next decade. Our prior Sunday weekly ESG etc. round up moves to this new service.
See PDF below for all charts