Terrier Investing
Long only, value, hedge fund manager

Cheap, But Not For A (Good) Reason: Celanese Offers High-Quality Growth

Executive Summary

In a market broadly agreed upon as expensive, where:

  1. companies that aren't growing much are awarded high multiples
  2. … and companies that grow a lot but make no money are awarded 10x higher multiples

What do you call a company that's:

  1. actually making money
  2. growing earnings 12%+ a year despite secular headwinds that may soon abate
  3. trading at a touch over 11x forward-year earnings, 13.6x if you count net debt?

I call it "cheap", and so does Credit Suisse, labeling it one of their "top ideas" in Basic Materials. I think 40% upside is possible over the next two years.

Celanese (NYSE:CE) is a specialty materials company with a diverse suite of product offerings, a...

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