On June 3, 2023, M&T Bank Corp reported a significant increase in its stake in Olin Co. According to the Form 13F filing submitted with the Securities and Exchange Commission, the institutional investor’s holdings in Olin surged by 126.4% during the fourth quarter. It acquired an additional 15,340 shares of specialty chemicals company’s stock, taking its total ownership to 27,479 shares worth $1,408,000.
Olin Corp., which was founded in 1892 as a blasting powder manufacturer and later transitioned into producing chemical products for several industries such as paper, pharmaceuticals, and textiles. The company operates through its various segments including Chlor Alkali Products and Vinyls, Epoxy and Winchester.
The Chlor Alkali Products and Vinyls segment is responsible for manufacturing and selling traditional chemicals such as chlorine, caustic soda while also producing widely used materials like vinyl chloride monomer (VCM), methylene chloride amongst other solvents that are used for various industrial applications.
Despite the changes in its operations since it was established over one hundred years ago, Olin has managed to adapt accordingly – meeting critical environmental regulations while still providing essential services to businesses across several sectors.
Looking at OLN’s recent stock trading trends reveals that it opened at $48.36 on Friday with a low of $41.33 recorded within the last year compared to a high of $67.25. Additionally, the firm has an impressive market capitalization of $6.25 billion with a price-to-earnings ratio measuring at 6.42 and a PEG ratio of 0.85 with a beta of 1.45 respectively.
It is noteworthy that an Institutional Investor such as M&T Bank trusts Olin Co enough to increase its stake so substantially reveals that they might have foreseen future growth potential within the Chemical industry or beyond which aligns with Olin’s culture of moving with the times while maintaining a leading position within their niche.
Overall, the stellar strides that Olin has made thus far have undoubtedly appealed to savvy investors like M&T Bank. Therefore, over the years, it would be interesting to watch how both Olin and its investors will continue to achieve newer heights while navigating the twists and turns of a constantly changing market landscape.
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Mixed Sentiments Surrounding Olin Corp’s Investment Potential Despite Interest from Hedge Funds and Institutional Investors
Olin Corp., a chemical products manufacturer, has recently drawn the attention of hedge funds and institutional investors as many added or decreased their stakes in the company. Vanguard Group Inc., for instance, raised its holdings by 3.2% during Q1 to $829,542,000. Other major investors such as State Street Corp., Dimensional Fund Advisors LP, Boston Partners and Bank of America Corp have also increased their position in the firm. A total of 85.77% of Olin’s stock is currently owned by such entities.
Despite this positive investment sentiment, several equity research analysts have expressed mixed outlooks for the company. While Royal Bank of Canada increased its price target from $74 to $76 on May 1st, Piper Sandler lowered their target price from $83 to $80 on May 2nd. Citigroup raised its target price from $58 to $65 but issued a “neutral” rating while StockNews.com downgraded Olin from “buy” to “hold”. Overall, Bloomberg.com estimates an average price target of $67.67 with an average rating of “Moderate Buy”.
Olin primarily operates in three segments such as Chlor Alkali Products and Vinyls, Epoxy and Winchester. The first segment alone produces and sells items such as chlorine and caustic soda, hydrochloric acid and other chemicals that contribute significantly towards global chemical demand. However, during Q1 FY21 Olin fell short of analysts’ expectations with reported earnings per share (EPS) coming down to $1.16 (vs consensus at $1.28). Though revenue stood at $1.84 billion for the quarter there were estimations that it would be around $2.05 billion based on Wall Street projections.
Nevertheless, with an annualized payout ratio and dividend yield standing at 10.62% and 1.65%, respectively Olin remains quite attractive to investors from the perspective of long-term growth and income. As a result, it can be concluded that proper due diligence on the part of investors is necessary before making any investment in Olin. While hedge funds find Olin attractive, equity research analysts have expressed mixed sentiments regarding its future prospects.
