John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

The Growth Prospects For Chase Corp. Are Better Than Implied By The Low Multiple

Company overview

Chase Corp. (NYSEMKT:CCF) manufactures protective materials such as specialty tapes, laminates, sealants, adhesives and coatings through its industrial and construction materials segments.

The real story is beneath the surface

Investors should not mistake the low organic growth as a result of operating in mature markets for a lack of financial or share price growth potential. For example, in the mrq revenue increased 1.5% to $54 million as revenue in the much larger industrial materials segment increased 4.6%, which offset a 7.7% decrease in the construction materials segment. However, there are two key takeaways that highlight the improvement in profitability and potential for steady top line growth.

First, although the sharp top and bottom line growth in...

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