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Many domestic workers limit their exposure to hard work by refusing to wash windows and other back breaking tasks. Solutia, Inc. (NYSE: SOA) is a U.S. company that is actually competing to do ALL the windows in China. Solutia's performance films division produces window film that saves up to 80% on energy requirements; reducing heat loss in cold months and solar penetration in hot months. China’s residential and office building boom is a highly lucrative market and Solutia has set up a sales office in China to pitch its performance films as well as films for solar cells.

Solutia has some competition in the China market. 3M Company (NYSE: MMM) is another U.S. producer of performance films with a sales presence in Asia. There are a number of China companies producing window films and Australia-based Hanita Pacific (formerly Film Pacific) has its eye on China as well. Solutia management has been promoting the idea of building standards in China that would help weed out the lower quality products and perhaps provide customers with more confidence in the industry.

Solutia manufactures a variety of performance materials and specialty chemicals. The company reported $2.0 billion in total sales in the year 2010, providing $87.0 million in net income. Demand conditions are looking good for Solutia and on a restructured capital base, the company expects to report strong earnings in 2011.

Investors have not caught up with the change of fortunes for Solutia. Against the consensus estimate, the stock is valued at 9.5 times earnings. We view the valuation as compelling at the current price level even after a steady increase in the stock price over the last several months.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Solutia: A Company That 'Does Windows'

Additional disclosure: Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.