Given the market's continued choppy / consolidating pattern, it makes sense to add a defensive stock or two, and one worth an evaluation is conglomerate Olin Corp.
Olin Corp. (NYSE: OLN) is a diversified producer of brass metal products, chlor-alkali chemicals, and ammunition.
Analysts like Olin's chlor-alkali business (21% of 2006 revenue), including products like caustic soda and chlorine, among others. An impressive brass operation (67% of 2006 revenue), and an ammunition business (12% of revenue) rounds-out OLN's diverse industrial plate. Look for the ammunition business to continue to benefit from strong military orders, in the immediate years ahead. The Reuters F2007/F2008 EPS consensus estimates for OLN are $1.50/$1.46.
The drawbacks? The commodity chemicals segment is cyclical -- some products are used in pulp/paper processing and to keep swimming pool water clean, for example -- so analysts will look for signs of a slower-economy-induced dip in orders in Q1/Q2 2008.
The First Call mean rating for OLN is: Buy. [7 firms.] Mean 2008 target: $24.00. [high: $27, low: $20.]
Stock Analysis: Olin Corp. is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from OLN's shares. Sell / Stop Loss if you were to purchase shares in this company: $13.
DISCLOSURE: Joseph Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
Olin Corp. has it covered, from bleach to bullets
Posted Jan 2nd 2008 4:40PM by Joseph Lazzaro
Filed under: Stocks to Buy
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