EMN was recommended as a buy “on dips below $48.75" in Investment Digest issue 715, dated May 14, 2012, by Personal Finance. EMN was then trading at $52.12, and has not presented a buying opportunity below $48.75 since. In this update, Personal Finance Editor Elliott Gue now recommends selling the stock if you own it, and not buying if you don’t, for reasons he explains below.
“Eastman Chemical (EMN) has successfully divested some of its lower-margin businesses in recent years and is executing well on its cost-cutting goals.
“The firm also benefits from a raw materials cost advantage over non-U.S. chemicals companies, thanks to the relative abundance of natural gas and natural gas liquids in North America. The shale oil and gas revolution has made chemicals manufacturing costs in the US among the lowest in the world.
“But Eastman has already seen a significant run-up in price and is considered a cyclical stock, the main reason the stock sold off last summer. Sell Eastman Chemical.”
- Elliott Gue, Personal Finance, May 9, 2012