ASH Stock Overview
Ashland Inc. provides additives and specialty ingredients worldwide.
Ashland Inc. Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$93.76|
|52 Week High||US$112.91|
|52 Week Low||US$83.29|
|1 Month Change||-8.94%|
|3 Month Change||-8.63%|
|1 Year Change||4.98%|
|3 Year Change||24.57%|
|5 Year Change||39.84%|
|Change since IPO||191.02%|
Recent News & Updates
At US$99.11, Is It Time To Put Ashland Inc. (NYSE:ASH) On Your Watch List?
Ashland Inc. ( NYSE:ASH ), is not the largest company out there, but it received a lot of attention from a substantial...
Ashland Inc. (NYSE:ASH) Shares Could Be 24% Below Their Intrinsic Value Estimate
In this article we are going to estimate the intrinsic value of Ashland Inc. ( NYSE:ASH ) by projecting its future cash...
Ashland: A Case Study In Conglomerate Revitalization
The story of Ashland is one of a conglomerate shedding waste. While Ashland's financial data may suggest weak performance over a longer timeframe, the past four quarters may highlight a new trend. As weak assets have now been sold off, the balance sheet vastly improved, and revenue growth returns, I find Ashland is worth a buy. From A Dull Cocoon Comes a Butterfly Ashland Inc. (ASH), formerly Ashland Global Holdings, was an old, tired specialty chemicals company that has gained a second wind of late thanks to a fairly significant restructuring of the business. Many struggling aspects of the group have been sold off, including the large Valvoline (VVV) group in 2016 (who recently had assets acquired by Saudi Aramco (ARMCO)). From a long-term perspective, ASH's finances look poor, as revenues have fallen over the past 20 years and earnings are volatile and relatively flat. However, some positive trends are emerging, and I believe the restructuring may be paying off at long last. This article will highlight the positives, and also the metrics that still need work, in order to assess whether the company is worth a shot. Ashland Investor Presentation July 2022 Seeking Alpha On the surface, Ashland's performance over the past decade or so hides the significant shifts within the company. With fairly solid returns over the past 10 years thanks to a slow rate of change and conservative management, ASH is trading around all-time highs. Also, strength over the past year has allowed for the company to remain elevated even as the market has fallen. This is partially due to the strong main product segments that drive forward momentum no matter what. Also, there is some weakness under the surface that has led to valuation issues, and I will address these as well. First, however, let's look at three primary revenue segments. Ashland is a diversified specialty chemicals company, a quintessential Buffett or Lynch-style "boring" company with leadership in three unique areas. First, the life sciences thanks to solutions in contract manufacture and formulation of retail nutraceuticals or wellness products, medical products such as radiology films and analysis systems, and pharmaceutical feedstock, particularly polymers for controlled release. Also, the company has significant exposure to personal care and cosmetics, with the provision of a wide range of base products to manufacturers. Lastly, the rest of the vast range of products in nearly every industry are also lumped together, and range from agricultural products to paint to even the energy industry. The range of high-quality products allows for safe growth, even if the client industries may not be of the highest quality, particularly in medicine and cosmetics. Instead, these industries provide growth due to the fact that each ASH customer will be looking to out-compete each other, and ASH is agnostic as to whether one particular company succeeds. Also, Ashland puts a focus on R&D and continues to try to find new growth paths thanks to new chemicals or processes. In particular, the company is looking to find new sustainable offerings that will allow clients to reduce their impact. Out with the old industries like low margin Valvoline, and in with the new premium goods. Ashland Recent performance has been solid in most revenue segments, with the only weakness in the now frowned-upon nutraceutical market. Instead, most segments are seeing double-digit growth between 15-20% YoY, and profit margins are increasing even more. The cycle of creating new high-margin, fast-growth products, and the unlocking of value through the sale of legacy assets is now the favored business style and is beginning to pay dividends (literally and figuratively). In fact, I also believe the company may be less cyclical than a typical specialty chemical company due to the sheer diversity of offerings, and so I believe Ashland is a solid long-term hold company rather than one to trade around. However, let's take a step back and look at the fundamentals first to determine whether the company is worth taking a position. Ashland Ashland Ashland Financial Details As we can see, recent performance has been driven mostly by improvements in profitability, although revenues are rebounding after pandemic weakness. The company also thinks carefully about shareholders and takes multiple measures to drive strong returns. In fact, most of the returns over the past decade have not been the result of revenue growth but rather increased profitability, reduced shares outstanding, and a general rise in average market valuation. As the share price is close to all-time highs based on the positives, it will be important to assess whether the financial performance reflects this, or there is risk in the shares falling moving forward. Ashland As discussed above, returns over the past decade or more have no relation to increases in revenues. In fact, the chart below highlights how revenues have fallen from over $8 billion per year to less than $2.2 billion in 2021. This pattern highlights the slow change within the company as legacy assets such as Valvoline were sold off. However, it seems like the restructuring is ending and management is happy with the results. Therefore, I am not worried by falling revenues over the years and will look at the sliver of hope of increasing quarterly revenues over the past few quarters as the signal of forward momentum returning. As of the Q3 earnings call, they had the following to say: Over the last decade, Ashland's journey of transformation has sharpened our focus as an additives and specialty ingredients company. As we have systematically identified and tackled the thorniest problems, we concentrate on areas rich in opportunities to innovate and drive value for customers, where innovation and expertise is one business unit can be leveraged in others. Koyfin Want to see where all the improvements have gone? Straight to EBITDA margins. As shown in the chart below, EBITDA margins have shown incredible improvements over the past 20 years as high-quality products have been the focus. Unfortunately, net income is not seeing the same pattern. Naysayers will certainly be pointing to low net income as a bad sign, I find that the most important value is EBITDA. Low net income can signal continued investments into innovation and operational improvement and should be considered with other factors. Management continues to invest significantly in both improvements and shareholder returns, and the balance sheet also shows the progress. Koyfin Bad assets lead to debt, and Ashland was heavily laden starting in 2012. However, most of this debt has been paid off over the past 10 years and leverage is now at a manageable level. The current net debt over EBITDA ratio is now 1.8x, a fairly safe level. At the same time, dilution has not been used to acquire funding, and instead, shares outstanding have fallen from 80 million to 54 million. As performance normalizes from this current strong position, look for steady free cash flow ("FCF") growth moving forward. If Ashland maintains this form, I believe they are a very solid company with stable fundamentals and innovative, moat-like product segments. Therefore, a high valuation may be supported if this trend continues.
Is Ashland (NYSE:ASH) A Risky Investment?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' It's only natural to consider a company's...
|ASH||US Chemicals||US Market|
Return vs Industry: ASH exceeded the US Chemicals industry which returned -17% over the past year.
Return vs Market: ASH exceeded the US Market which returned -23.7% over the past year.
|ASH Average Weekly Movement||3.5%|
|Chemicals Industry Average Movement||6.2%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.7%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: ASH is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: ASH's weekly volatility (4%) has been stable over the past year.
About the Company
Ashland Inc. provides additives and specialty ingredients worldwide. It operates through Life Sciences; Personal Care & Household; Specialty Additives; and Intermediates and Solvents segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions.
Ashland Inc. Fundamentals Summary
|ASH fundamental statistics|
Is ASH overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|ASH income statement (TTM)|
|Cost of Revenue||US$1.54b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||2.86|
|Net Profit Margin||6.60%|
How did ASH perform over the long term?See historical performance and comparison