Chemical

PPG Industries (PPG) may be Cramer’s favorite chemical company, but Dow Chemical (DOW) gains the most from changing nat-gas prices. For every $1 change in natural gas price per British thermal units, Dow’s earnings per share change 31 cents to 40 cents. The company’s expected to earn 27 cents in 2009 but $1.07 in 2010, so cheap natural gas is “huge,” Cramer said, for Dow Chemical.

In the past month, the companies in these industries – International Paper (IP) and Temple-Inland (TIN) for corrugated boxes, PPG Industries (PPG) and Dow Chemical (DOW) for PVC and Martin Marietta Materials (MMC) for the aggregates used in bricks – have reported a bump in business. Cramer wasn’t surprised, though, because the stock market usually predicts the economy’s movements six months ahead of time, and we’d hit a low in early March.

At that price, there is so much good that can happen in expanding margins of the many companies that use natural gas, mostly chemical companies such as Dow Chemical (DOW) and PPG Industries (PPG) but also any company involved in acquiring plastic or its derivatives, certainly glass makers such as Owens-Illinois (OI), which has skyrocketed, and, of course, utilities.

cycle

The turn in Dow Chemical (DOW) is being viewed as real. This is one where for a while the whole company seemed to be in doubt off the Rohm & Haas deal. But with raw costs -- natural gas -- way down, the balance sheet improving and the tremendous amount of cost-cutting flowing through, this one's viewed as being a hugely successful turn. Andrew Liveris talked about progressive improvement in the quarter, once again reminding us that July was a strong month.

The industrials, transports, retailers, minerals and oils were “the severe-disease plays,” Cramer said. No one thought they would recover, and bankruptcy, it seemed, was a foregone conclusion. Not anymore, though. As the economy improves, so, too, will the US Steels (X), Nordstroms (JWN) and Dow Chemicals (DOW) of the world. These companies “are no longer in critical condition,” and Cramer predicted “a full recovery” as they rebuild their balance sheets.

Company that is making a turn-around from a poorly timed take-over. Much of the position acquired below $10.

Our stock market cannot absorb another run to $70 or $80 oil. The Procter & Gambles (PG) and the Dow Chemicals (DOW) cannot withstand it.

"That means virtually any of the large-cap banks or retailers or auto-related entities or insurance companies or natural gas companies that are too levered are candidates for a spot equity offering. Think about it: offerings like Simon Property's (SPG) have been going on for weeks in the real estate investment trusts and the utilities. Dow Chemical (DOW) and Las Vegas Sands (LVS) showed you a similar pattern." ("A Bevy of Bank Offerings," 5-12-09)

Poor Management

lost big

balance sheet

CEO misleads investors.

It was going to be a winner... :(

did not asset mgr to eval ROH

exposed

Having trouble with high imput costs.

Dull, boring and a loser

going nowheres for years.Good dividend.