“Let’s step aside from Huntsman Corp. (HUN) at $13.24, just above our average cost basis of $13.16. Huntsman beat on earnings today but missed on revenues. Its polyurethane business is firing on all cylinders due to demand for foam insulation and grew by 12% in the last quarter. But its other three segments; advanced materials, textiles and pigments all shrunk.
“Huntsman’s stock is cheap right now but we can step aside from the company just above break-even (after being in the red) and put the capital to work in companies that quite frankly have more growth potential in the second half of 2012. We recorded our first tranche in Huntsman on March 23, 2012 at $14.25 and our second tranche just a few weeks ago on July 18 at $12.07, so our average cost basis is $13.16. We received one $0.10 dividend during our holding period (on our first tranche, or equal to a 0.70% yield).
“Taking everything into account we’ll record a nominal gain of 1.3% on Huntsman, which is 6.6% better than the Russell 2000 since we initiated coverage. Action to take: Sell Huntsman (NYSE: HUN) near $13.24.”
- Ian Wyatt, Small Cap Investor PRO, August 1, 2012