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ICO Inc. (ICOC): Used in a lot of Products, but Useful in Your Portfolio?

ICO is a maker of specialty resins and concentrates, and provides specialized polymer processing services. The company’s products can be found in manufactured household items, such as toys, household furniture, and trash receptacles; automobile parts; agricultural products, such as fertilizer and water tanks; paints; and metal and fabric coatings. ICO also provides ambient grinding, jet milling, compounding, and ancillary services for resins produced in pellet form and other material forms. The company has 19 factories in 10 countries across the United States, Europe, Asia and the Middle East. It also exports its products to Africa and Asia.

The Texas-based company, which was founded in 1978, has nearly 1,000 employees and competes with firms such as A. Schulman Inc., Polyone Corp. and privately held KRATON Polymers LLC. In an encouraging sign for potential shareholders, the company said on Monday that it would buy back up to $12 million worth of its stock over the next two years. Last month, the company said sales for the second quarter rose two percent to $115.7 million and debt was slashed by $10 million to $58.5 million. For the nine months ended June 30, sales rose by almost $43 million to just over $308 million, according to company filings.

ICO customers include major chemical companies, polymer production affiliates of major oil exploration and production companies, and manufacturers of plastic products. In other events, investors should be aware that Chief Executive Officer and President John Knapp purchased more than 33,000 ICO shares in August. Sixty percent of ICO shares are held by institutions, including mutual funds run by John Hancock, Oppenheimer and Vanguard. Two sell-side analysts cover the company.

ICO, which has a market capitalization of $166 million, closed at $5.98 on Tuesday. The shares have traded between $4.56 and $16.50 over the past 52 weeks and could be considered inexpensive with a price-to-earnings ratio of 8.7.

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