Greenlight analysts said at the Sohn investment conference in New York on Wednesday that they had taken a position in Solvay (EBR:) (SLVYY), European chemical company.
Solvay is a Belgian company that produces and distributes chemicals and plastics, including peroxides and soda ash. Its market capitalization is $2.6 billion. The company does not trade in the US.
Analysts told listeners that “Solvay is a critical chemical company with a number one position in all of its markets.”
They added that while all of these markets are considered commodity businesses, they are actually “more profitable and much more stable than most commodity chemical businesses.”
In their presentation, analysts praised the company’s management and its financial discipline. In addition, they stated that the company’s valuation is very attractive.
They believe that if the company’s management meets its growth and cost plans, normal earnings per share should rise to more than €6 per share.
“Overall, Solvay is a commodity chemicals company with relatively strong and stable profitability and a higher return on equity,” they said. “Earnings per share by 2028 of 3.7 times projected earnings, with a near double-digit dividend yield, seem too cheap,” the analysts added.
Additionally, CNBC was reportedly told that Solvay is now a top five position in their portfolio.