Phosphoric acid and phosphates are essential ingredients for a variety of industries. Specialty beverages, processed foods, dental care products, and pharmaceuticals are some of the most profitable lines of business that depend on various forms and derivatives of phosphoric acid. The petrochemical industry is another important customer group for this company. The stock has this major advantage of having an unusually broad array of industrial clients through which it can grow sales.

Company management appears to be on track to improving financial performance. Sales have grown annually by 9.4% during the last quarter of 2007. The trend of operating losses has been reversed, even though the company suffered production stoppages at its Mexican production site, and unusual legal expenses during the quarter. The operating margin would have improved even further without these one-off expenses. Management has done well to effect important selling price increases and product mix improvements. These decisions will continue to impact business results throughout 2008. The company’s focus on the profitable US market segments also augurs well for future stock value. Capital expenditure, which has nearly doubled in 2007 over the previous year, will result in new production capacity coming on stream by March 2008.

The Basic Materials sector and Chemical Manufacturing industry are relatively safe options for investors during recessionary phases of economies. Phosphoric acid and its derivatives are used for such essential categories of goods that demand levels are unlikely to fall even if consumer spending on other categories decreases. This stock is a worthy contender for support within the sector and industry because of the management’s demonstrated abilities to reverse the trend of past losses.

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