Analysis on Olin Corporation
The Analysis and Valuation of
Olin Corporation (OLN)
By Elizabeth Demmon
Submitted on December 13, 2011
SUMMARY 1 BACKGROUND 1 Industry and company 1 Chlor Alkali 1 Winchester 2 Management and Ownership 3 Recent developments 3 FINANCIAL ANALYSIS 3 Discussion of financial statements 3 Discussion of financial ratios 4 OUTLOOK AND FORECAST 4 Economy 4 Industry 5 Company 5 Investment thesis 5 Important value drivers 5 Risks, caveats, and exposures 6 VALUATION 7 Summary of important series 7 Selected growth rates 7 Components of weighted average cost of capital (WACC) 7 Free cash flows and economic profit 7 BIBLIOGRAPHY 9
SUMMARY
As a student analyst for Drake University’s Krause Challenge Fund, I have conducted a financial analysis and valuation of Olin Corporation, a producer of Chlor Alkali products and Winchester ammunition. Olin has recently undergone restructuring and acquired the other half of a previously owned subsidiary, which I expect to reduce operating costs. The current market price undervalues the company. Therefore, I suggest we purchase Olin for our portfolio. The following is the detailed results of my analysis.
BACKGROUND
Industry and company
Olin Corporation is the manufacturer of two major segments: Chlor Alkali products and Winchester ammunition. The company has been around for over 100 years and is a major market participant within North America. Headquartered in Clayton, MO, Olin has multiple manufacturing facilities with the United States and one location in Canada.
Chlor Alkali
Olin is the third largest producer of Chlor Alkali products and the largest producer of industrial bleach in North America according to data from Chemical Market Associates, Inc.. Chlorine and caustic soda are the co-products Olin produces in fixed ratios called Electrochemical Units (ECU) through the electrolysis of salt. Both chlorine and caustic soda are used in the production of bleach. A complete
Olin Corporation (OLN)
By Elizabeth Demmon
Submitted on December 13, 2011
SUMMARY 1 BACKGROUND 1 Industry and company 1 Chlor Alkali 1 Winchester 2 Management and Ownership 3 Recent developments 3 FINANCIAL ANALYSIS 3 Discussion of financial statements 3 Discussion of financial ratios 4 OUTLOOK AND FORECAST 4 Economy 4 Industry 5 Company 5 Investment thesis 5 Important value drivers 5 Risks, caveats, and exposures 6 VALUATION 7 Summary of important series 7 Selected growth rates 7 Components of weighted average cost of capital (WACC) 7 Free cash flows and economic profit 7 BIBLIOGRAPHY 9
SUMMARY
As a student analyst for Drake University’s Krause Challenge Fund, I have conducted a financial analysis and valuation of Olin Corporation, a producer of Chlor Alkali products and Winchester ammunition. Olin has recently undergone restructuring and acquired the other half of a previously owned subsidiary, which I expect to reduce operating costs. The current market price undervalues the company. Therefore, I suggest we purchase Olin for our portfolio. The following is the detailed results of my analysis.
BACKGROUND
Industry and company
Olin Corporation is the manufacturer of two major segments: Chlor Alkali products and Winchester ammunition. The company has been around for over 100 years and is a major market participant within North America. Headquartered in Clayton, MO, Olin has multiple manufacturing facilities with the United States and one location in Canada.
Chlor Alkali
Olin is the third largest producer of Chlor Alkali products and the largest producer of industrial bleach in North America according to data from Chemical Market Associates, Inc.. Chlorine and caustic soda are the co-products Olin produces in fixed ratios called Electrochemical Units (ECU) through the electrolysis of salt. Both chlorine and caustic soda are used in the production of bleach. A complete
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