How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Olin (
OLN Quick Quote OLN - Free Report) ten years ago? It may not have been easy to hold on to OLN for all that time, but if you did, how much would your investment be worth today? Olin's Business In-Depth
With that in mind, let's take a look at Olin's main business drivers.
Based in Clayton, MO, Olin Corporation is a vertically-integrated global producer and distributor of chemical products and U.S. maker of ammunition. Internationally, the company operates in regions including Latin America, Asia Pacific and Europe.
Olin’s operations are focused in three business segments — Chlor Alkali Products and Vinyls, Epoxy and Winchester.
Chlor Alkali Products and Vinyls segment (46% of 2021 Sales) – The division produces and sells chlorine and caustic soda, vinyl chloride monomer and ethylene dichloride, methylene chloride, methyl chloride, carbon tetrachloride, chloroform, trichloroethylene, perchloroethylene, hydrochloric acid, vinylidene chloride, hydrogen, potassium hydroxide and bleach products.
The division is one of the largest marketers of caustic soda in Brazil. The company’s diversified caustic soda sourcing enables it to supply global customers cost effectively. Notably, caustic soda is used in various end-use applications including water treatment, pulp and paper, soaps and detergents. Products from this segment are delivered through deep water and coastal barge, pipeline, marine vessel, truck and railcar.
Epoxy segment (36%) – The division makes and sells a complete range of epoxy materials including epichlorohydrin, allyl chloride, solid epoxy resins, liquid epoxy resins. It also produces downstream products such as differentiated epoxy resins and additives.
The division offers a wide range of applications including marine coatings, electrical laminates, wind energy, consumer goods and composites. It also caters to numerous applications in protective coatings and civil engineering.
The Winchester segment (18%) – The unit produces and sells sporting ammunition, small caliber military ammunition and components, reloading components and industrial cartridges.
The company also bagged a multi-year contract that was awarded by the U.S. Army to operate the government-owned Lake City ammunition facility. The move is expected to boost Winchester unit's annual sales by $450-$550 million. The contract became effective during fourth-quarter 2020. Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Olin ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2012 would be worth $3,379.25, or a gain of 237.93%, as of May 23, 2022, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 201.21% and the price of gold went up 13.12% over the same time frame.
Looking ahead, analysts are expecting more upside for OLN.
Olin’s earnings and sales in the first quarter beat the respective Zacks Consensus Estimate. Its strategic investment in the information technology (IT) project is expected to provide annual cost savings. The project is expected to maximize cost effectiveness and efficiency. The Lake City contract will also drive sales and profitability in the company's Winchester unit. The multi-year contract represents a significant driver for the unit. Olin is also executing a number of productivity projects. Cost savings from these projects are expected to contribute to its margins. It also remains focused on boosting shareholders' returns. However, it is exposed to cost headwinds in raw materials. Higher commodity costs may also affect Winchester’s margins in the second quarter. Its Epoxy segment is exposed to higher power costs.
Over the past four weeks, shares have rallied 14.06%, and there have been 5 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.