Back to top

Analyst Blog

Zacks Equity Research

Celanese's Infringement Complaint Voted to Be Investigated

CE KRO KOP CC

Trades from $3

Celanese Corporation (CE - Free Report) had filed a complaint against the unlawful importation of certain artificial sweeteners into the U.S. with the United States International Trade Commission (USITC) last month. The company had filed this complaint particularly for investigation of the import of Acesulfame Potassium (Ace-K). Celanese said last week that the commission has voted in favor of launching the investigation into the import of the sweeteners.

Celanese had claimed that numerous producers of Ace-K unlawfully imported the sweeteners made using its patented technology from China into the U.S. The manufacturers had been alerted of the infringement by the filing.

The investigation is based on alleged violations of section 337 of the U.S. Tariff Act of 1930, which relates to the importation of high-potency sweeteners into the U.S. The importations allegedly infringe U.S. Patent No. 9,024,016, owned by Celanese. As part of the investigation, the commission will consider a general prohibition order, preventing the import of all infringing sweeteners into the country.

Shares of Celanese closed 1.8% lower at $77.29 on Nov 25.

Celanese kept its earnings streak alive with a beat in third-quarter 2016. Moreover, its adjusted earnings of $1.67 per share increased 11.3% year over year. In the reported quarter, the company entered into a definitive agreement to fully acquire Forli, Italy-based SO.F.TER. Group, one of the largest independent thermoplastics compounders in the world. This acquisition will nearly double the number of Celanese global engineered materials platforms.

The company retained its expectations of 8–10% growth in adjusted earnings per share for 2016, factoring in the benefits of productivity actions and operational excellence as well as strength of commercial models.

Celanese’s strategic measures including productivity and efficiency improvement actions should lend support to its earnings in 2016. Further, it is expected to gain from capacity expansion and growth initiatives in the emerging regions. Moreover, the company continues to generate strong cash flows and remains focused on returning value to its shareholders.

Celanese currently carries a Zacks Rank #2 (Buy).

Stocks to Consider

Some other well-placed companies in the chemical space include Koppers Holdings Inc. (KOP - Free Report) , The Chemours Company (CC - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Koppers Holdings has an expected long-term growth of 10%.

Chemours has an expected long-term growth of around 15.5%.

Kronos Worldwide has an expected long-term growth of around 5%.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>