Conservationist arguments against plastics have begun to run out of steam, now that the business world has a firm track towards degradable forms of this modern material with multiple applications. Powdered polymers are even more versatile and useful in business. Here is a stock investment opportunity with a profitable combination of current cash generation as well as superior future growth opportunities. Management capabilities in this company blend seamlessly with the net revenue potential of the business sector: the stock outperforms the sector in key ratios such as the Price to Earnings ratio and the gross revenue growth rate. The company seems well set to keep outpacing its closest rivals, and has many degrees of freedom in terms of its strategic planning and execution. It also has an impressive track record of protecting its technology moat in powdering polymers for over two decades.
One of the most attractive features of this stock is that the company is not overly dependent on any particular sector, country, or even customer. It has shares in a broad array of market segments, many different end-applications for its technology, and manufacturing capacities spread over all major currency zones. It is therefore able to generate stable business results over many different business scenarios. Experienced stock investors will not be able to cite many comparable opportunities to this one, in terms of Sensitivity Analysis showing such uniformity in cash flow projections under different assumptions. This is why this stock is worth owning and holding to bring durability to every portfolio in troubled times.
The Company’s manufacturing capabilities include size reduction, compounding and related services. These services are an intermediate step between the production of polymer resins and the manufacture of a range of products, such as toys, water tanks, paint, garbage bags, plastic film or other polymer products. The Company’s manufacturing processes are used to produce powders for sale by the Company for toll processing services and to manufacture concentrates. The size reduction services involve ambient grinding, a mechanical attrition milling process suitable for products which do not require ultra fine particle size and are not highly heat sensitive. The Company also provides jet milling services used for products requiring very fine particle size such as additives for printing ink, adhesives, waxes and cosmetics. Jet milling uses high velocity compressed air to reduce materials to sizes between 0.5 and 150 microns.
ICO Polymers North America, ICO Brazil, ICO Europe and ICO Asia Pacific primarily produce competitively priced polymer powders for the rotational molding industry, as well as other markets for powdered polymers, including masterbatch and concentrate producers, users of polymer-based metal coatings, and non-woven textile markets. Masterbatches are concentrates that incorporate all additives a customer needs into a single package for a particular product manufacturing process, as opposed to requiring numerous packages. The segments also provide size reduction services on a tolling basis. The Company’s ICO Europe segment includes operations in France, Holland, Italy and the U.K. The Company’s ICO Asia Pacific segment includes operations in Australia, Malaysia, New Zealand and the United Arab Emirates.
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