Author Topic: DWDP - Dow DuPont  (Read 11996 times)

vinod1

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Re: DWDP - Dow DuPont
« Reply #30 on: April 02, 2019, 07:12:11 AM »
Are the spin-offs planned right from the beginning of the merger of Dow and DuPont? Or are they a reaction to issues with the merger?

I have not followed this and just wanted to know the background. Can anyone help?

Thanks

Vinod
The fundamental algorithm of life: repeat what works. –Charlie Munger


gfp

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Re: DWDP - Dow DuPont
« Reply #31 on: April 02, 2019, 07:21:19 AM »
Yes, planned from the beginning.  Not even sure the merger would have been allowed without the separation plan

Are the spin-offs planned right from the beginning of the merger of Dow and DuPont? Or are they a reaction to issues with the merger?

I have not followed this and just wanted to know the background. Can anyone help?

Thanks

Vinod

vinod1

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Re: DWDP - Dow DuPont
« Reply #32 on: April 02, 2019, 07:41:22 AM »
Yes, planned from the beginning.  Not even sure the merger would have been allowed without the separation plan

Are the spin-offs planned right from the beginning of the merger of Dow and DuPont? Or are they a reaction to issues with the merger?

I have not followed this and just wanted to know the background. Can anyone help?

Thanks

Vinod

Thanks gfp!
The fundamental algorithm of life: repeat what works. –Charlie Munger

Spekulatius

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Re: DWDP - Dow DuPont
« Reply #33 on: May 12, 2019, 06:03:51 PM »
Wanted to bump this one, since at around $31.5 and probably cheaper tomorrow, the sum of Corteva (seeds and AG chemicals) and the stub DuPont (special materials and chemicals) trades at around 9.5-10x EBITDA. I like them both. Corteva can be compared with Monsanto befor the Bayer merger (not quite the same quality, but close), which was bought for 16x EBITDA and stub DuPont to MMM. So, while not optical cheap, it sum of both trades at a large discount to peers.

There are concerns with the impact of the trade war on business, but this applies to comps too. the positive is that both DuPont and Corteva are only half way through the restructuring from the combination of DuPont and Dow, so I expect more synergies dropping to the bottom line. On top of that, we get hopefully the spin-off dynamics. I am planning to o bump this up a major (or two major) position on price weakness.
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ander

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Re: DWDP - Dow DuPont
« Reply #34 on: May 13, 2019, 12:35:32 PM »
Wanted to bump this one, since at around $31.5 and probably cheaper tomorrow, the sum of Corteva (seeds and AG chemicals) and the stub DuPont (special materials and chemicals) trades at around 9.5-10x EBITDA. I like them both. Corteva can be compared with Monsanto befor the Bayer merger (not quite the same quality, but close), which was bought for 16x EBITDA and stub DuPont to MMM. So, while not optical cheap, it sum of both trades at a large discount to peers.

There are concerns with the impact of the trade war on business, but this applies to comps too. the positive is that both DuPont and Corteva are only half way through the restructuring from the combination of DuPont and Dow, so I expect more synergies dropping to the bottom line. On top of that, we get hopefully the spin-off dynamics. I am planning to o bump this up a major (or two major) position on price weakness.

Do you think worthwhile to wait until the Corteva spin is done or does not matter at this stage?

dwy000

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Re: DWDP - Dow DuPont
« Reply #35 on: May 13, 2019, 02:01:01 PM »
Wanted to bump this one, since at around $31.5 and probably cheaper tomorrow, the sum of Corteva (seeds and AG chemicals) and the stub DuPont (special materials and chemicals) trades at around 9.5-10x EBITDA. I like them both. Corteva can be compared with Monsanto befor the Bayer merger (not quite the same quality, but close), which was bought for 16x EBITDA and stub DuPont to MMM. So, while not optical cheap, it sum of both trades at a large discount to peers.

There are concerns with the impact of the trade war on business, but this applies to comps too. the positive is that both DuPont and Corteva are only half way through the restructuring from the combination of DuPont and Dow, so I expect more synergies dropping to the bottom line. On top of that, we get hopefully the spin-off dynamics. I am planning to o bump this up a major (or two major) position on price weakness.

Do you feel this is cheap intrinsically at this price or just cheap relative to the comps?  I haven't dug in for a long long time but just skimming, it looks like they basically just cover dividends from a cash flow basis (granted this is before all the synergy cost savings kick in).  Curious as to whether the comps are just overpriced or this is a solid return from a cash flow/growth perspective on it's own.

Spekulatius

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Re: DWDP - Dow DuPont
« Reply #36 on: May 13, 2019, 03:18:30 PM »
Wanted to bump this one, since at around $31.5 and probably cheaper tomorrow, the sum of Corteva (seeds and AG chemicals) and the stub DuPont (special materials and chemicals) trades at around 9.5-10x EBITDA. I like them both. Corteva can be compared with Monsanto befor the Bayer merger (not quite the same quality, but close), which was bought for 16x EBITDA and stub DuPont to MMM. So, while not optical cheap, it sum of both trades at a large discount to peers.

There are concerns with the impact of the trade war on business, but this applies to comps too. the positive is that both DuPont and Corteva are only half way through the restructuring from the combination of DuPont and Dow, so I expect more synergies dropping to the bottom line. On top of that, we get hopefully the spin-off dynamics. I am planning to o bump this up a major (or two major) position on price weakness.

Do you feel this is cheap intrinsically at this price or just cheap relative to the comps?  I haven't dug in for a long long time but just skimming, it looks like they basically just cover dividends from a cash flow basis (granted this is before all the synergy cost savings kick in).  Curious as to whether the comps are just overpriced or this is a solid return from a cash flow/growth perspective on it's own.

It’s more based on comps than on being cheap in absolute terms. I think it would need to mature post the spinoff to really look cheap. The market assigns a relatively high multiple to a business that isn’t very economically sensitive and has a long growth runaway, albeit at moderate rates. Seed companies for example had high multiples as long as long as I can remember.

As far as waiting for the Corteva spin-off, it depends on individual preference. I am fine holding both, so I have no problem buying them together.

Dow is interesting too, albeit more cyclical. Their earnings are dependent on the differential between crude and NG, which tend to be higher when crude is higher. They are also more dependent on the economic cycle. I prefer DWDP, but I could see myself buying into DOW as well. i would regard it as a cyclical income stock. They seem to handle the recent margin pressure better than competitors, which seem to support the management thesis that they are a low cost producer.
To be a realist, one has to believe in miracles.

Liberty

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Re: DWDP - Dow DuPont
« Reply #37 on: May 21, 2019, 06:01:52 AM »
https://www.prnewswire.com/news-releases/dupont-to-present-at-electrical-products-group-conference-300853587.html

"Breen will note that DuPont intends to announce a $2 billion share repurchase program, subject to Board of Director approval, shortly after its transition to an independent company upon the separation of its specialty products and agriculture businesses effective June 1, 2019.  The company intends to make purchases under the plan during calendar 2019."
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Liberty

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Re: DWDP - Dow DuPont
« Reply #38 on: Today at 12:24:16 PM »
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

Spekulatius

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Re: DWDP - Dow DuPont
« Reply #39 on: Today at 05:47:10 PM »
Transcript of Breen presentation on May 21st:

http://s21.q4cdn.com/813101928/files/doc_downloads/2019/05/EPG-Transcript.pdf

Awesome. I really like the way they are benchmarking themselves against competitors - very evident specifically in the Dow presentation. It has become one of my larger positions recently and I think it’s a good example to buy a good company with great management at a very fair price.
To be a realist, one has to believe in miracles.