KMG Chemicals: Current Bounce Offers Short-Term 20% Upside But Sub-Par Long-Term Returns
- After numerous months of bad news, negative sentiment is finally turning positive.
- Stock offers good short-term upside of 20% but at high downside risks.
- However, long-term returns are likely to lag indexes as the company’s long-term strategy has multiple weaknesses.
- Organic sales are likely to stagnate or even fall in the long run.
- Multiple signs point to increasing margin pressures.