Ashland: Time to Take Some Profits Off the Table?

Ashland makes specialty resins, polymers, and adhesives for sale in North America and Europe. It also owns the Valvoline oil-change brand and oil service chain, and the Zerex anti-freeze brand, among other business operations.

The First Call FY2010/FY2011 EPS estimates for ASH are $3.97 to $4.42. Each EPS estimate looks about 5% low, according to my analysis.

Technically, as noted, Ashland's stock chart is strong -- an uptrend, with the stock registering only one, major breach of the key, 50-day moving average in the past year.

2010 Outlook: I view Ashland Inc. as a long-term play, but if investors are looking to sell ASH within the year, it's probably best to take your profits after it rises to $68-69, if it fails to clear $70.

I'd also raise the sell/stop loss to $48 from $23, making this a profitable trade for your May 2009-bought shares.

Stock Analysis: I consider Ashland Inc. to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in ASH now. Under any circumstance, I wouldn't buy more than 50% of my ASH position before June 2010 and I'd put a sell/stop loss at: $48.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.