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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Primary Recommendation

Elementis - Specialty chemicals firm enjoys high margins and returns on capital

May 2013

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • ELM
  • Price:
  • 247p
Elementis, which makes specialty additives to “enhance the look, feel and stability of industrial paints and coatingsâ€, may not immediately set pulses quickening but the shares have produced a barnstorming performance on the back of a purple patch in which eps has soared from 4.3 cents to 23.3 cents between 2009-2012. The secret behind its success is that Elementis owns proprietary technology, which it has used to establish a dominant position in its markets. It looks like Elementis is in a classic virtuous circle of growth. The group develops cost effective products, has found new markets in personal care and oil field drilling and through efficient manufacturing systems generates high gross margins. The free cash generated is used t ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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