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The following are the top rated Materials stocks according to Validea’s Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.
STEPAN CO (SCL) is a mid-cap growth stock in the Chemical Manufacturing industry. The rating according to our strategy based on Warren Buffett is 39% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Stepan Company is a producer and seller of specialty and intermediate chemicals that are used in a variety of end products. The Company operates through three reportable segments: Surfactants, Polymers and Specialty Products. The Surfactants segment offers ingredients for consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. Other applications include fabric softeners, germicidal quaternary compounds, disinfectants, lubricating ingredients, and others. The Polymers segment includes polyurethane polyols, polyester resins and phthalic anhydride. Polyurethane polyols are used in the manufacturing of rigid foam for thermal insulation in the construction industry, plastics and building materials. The Specialty products segment includes flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement, and pharmaceutical applications.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | PASS |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | FAIL |
| USE OF RETAINED EARNINGS: | FAIL |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | FAIL |
Detailed Analysis of STEPAN CO
APTARGROUP, INC. (ATR) is a mid-cap growth stock in the Fabricated Plastic & Rubber industry. The rating according to our strategy based on Warren Buffett is 38% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AptarGroup, Inc. is a designer and manufacturer of a range of drug delivery and consumer product dispensing, sealing and active packaging solutions and services. The Company operates through three segments: Aptar Pharma, Aptar Beauty and Aptar Closures. Aptar Pharma includes operations that sells dispensing systems and sealing solutions and also manufactures and sells elastomeric primary packaging components. The Company’s products include stoppers for infusion, antibiotic, lyophilization and diagnostic vials. The Aptar Beauty segment includes operations that sell dispensing systems, drug delivery systems, sealing solutions and services to the prescription drug, consumer health care, injectables, and active material science solutions markets. The Aptar Closures business serves multiple markets, including food, beverage, personal care, home care, beauty and healthcare. This segment offers food protection business and elastomeric flow-control technology business.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS PREDICTABILITY: | PASS |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | FAIL |
| SHARE REPURCHASE: | NEUTRAL |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | FAIL |
Detailed Analysis of APTARGROUP, INC.
FREEPORT-MCMORAN INC (FCX) is a large-cap growth stock in the Metal Mining industry. The rating according to our strategy based on Warren Buffett is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Freeport-McMoRan Inc. is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include the Morenci, Cerro Verde and Grasberg (Indonesia mining) copper mines, the Rod & Refining operations and Atlantic Copper Smelting & Refining. The Company has organized its mining operations into four divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru. The Company’s copper products include copper concentrate, copper cathode and continuous-cast copper rods.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS PREDICTABILITY: | FAIL |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | FAIL |
| SHARE REPURCHASE: | PASS |
Detailed Analysis of FREEPORT-MCMORAN INC
AMERICAN VANGUARD CORP. (AVD) is a small-cap growth stock in the Chemical Manufacturing industry. The rating according to our strategy based on Warren Buffett is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: American Vanguard Corporation (AVD) is a diversified specialty and agricultural products company. The Company develops and markets products for crop protection and management, turf and ornamentals management and public and animal health. AVD conducts its business through, its principle operating subsidiaries, including AMVAC Chemical Corporation (AMVAC) for its domestic business and AMVAC Netherlands BV (AMVAC BV) for its international business. AMVAC is a manufacturer of chemical, biological and biorational products that develops and markets solutions for agricultural, commercial and consumer uses. AMVAC BV sells product both directly and through its network of subsidiaries in various international territories. The Company’s products include insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, and soil fumigants, which are marketed in liquid, powder and granular forms. It also manufactures microbial cleaning products BioMop-Plus and DrainGel.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS PREDICTABILITY: | FAIL |
| DEBT SERVICE: | FAIL |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | PASS |
| USE OF RETAINED EARNINGS: | FAIL |
| SHARE REPURCHASE: | PASS |
Detailed Analysis of AMERICAN VANGUARD CORP.
SIBANYE STILLWATER LTD (ADR) (SBSW) is a mid-cap value stock in the Metal Mining industry. The rating according to our strategy based on Warren Buffett is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Sibanye-Stillwater Limited is a mining and metals processing company. The Company offers mining and processing operations and projects and investments across five continents. It is the primary producer of platinum, palladium, rhodium and gold. It produces other platinum group metals (PGMs), such as iridium and ruthenium, along with chrome, copper and nickel as by-products. It provides a portfolio of PGM operations in the United States (US), South Africa, and Zimbabwe; gold operations and projects in South Africa, and copper, gold and PGM exploration properties in North and South America. The Company’s gold project in the Southern Africa region includes Beatrix, Cooke, Driefontein, Kloof, RDRGOLD, and Rand Refinery. Its Southern Africa PGM projects include Kroondal, Rustenburg, Mimosa, Marikana and Platinum Mile. Its PGM project in the Americas region includes Stillwater & East Boulder and Columbus Metallurgical Complex. It also offers a portfolio in green metal projects and operations.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS PREDICTABILITY: | FAIL |
| DEBT SERVICE: | PASS |
| RETURN ON EQUITY: | FAIL |
| RETURN ON TOTAL CAPITAL: | FAIL |
| FREE CASH FLOW: | FAIL |
| USE OF RETAINED EARNINGS: | PASS |
| SHARE REPURCHASE: | PASS |
| INITIAL RATE OF RETURN: | PASS |
| EXPECTED RETURN: | FAIL |
Detailed Analysis of SIBANYE STILLWATER LTD (ADR)
About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world’s richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures — a cherry Coke, a good burger, and a good book are all near the top of the list — have been well-documented.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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