November 21, 2011 - Huntsman Corporation (HUN-NYSE) is in the manufacture and sale of differentiated organic and inorganic chemical products worldwide. Its products comprise a range of chemicals and formulations which are marketed to consumer and industrial customers.

Its key products include MDI, amines, surfactants, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride, and titanium dioxide.

The company operates in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments. Its Polyurethanes, Performance Products, Advanced Materials, and Textile Effects segments produce differentiated organic chemical products; and the Pigments group makes inorganic chemical products. Huntsman Corporation was founded in 1970 and is based in Salt Lake City, Utah.

Chairman and CEO: Jon M. Hunstman. Yes, the same Jon Huntsman who wants to be the Republican Presidential nominee. We don't know how he'll do as a politician, but here's what his company looks like.

Lately, the stock has been hit. Most likely because demand for one of its products (TiO2...titanium dioxide....used in paints, plastic or paper to provide maximum whiteness and opacity) has diminished. Sales came in weaker than expected in the third quarter. A large income tax expense resulted in a loss of 14 cents for the net income from continuing operations.

Analysts think the worst is over, and most of the bad news is reflected in the stock's price, having gone from $21.50 to $8.10 in a matter of months. (It reached a low of $2.00 in late 2008.) Now it's back to $10.75 as of this writing. There's good reason to believe it will go higher.

Part of it is management's extensive restructuring program that aims to cut fixed and variable expenses, leading to better margins even if sales slow again (they went from $10.215 billion in 2008 to $7.763 billion in 2009....in 2010, they were $9.25 billion...this year, anlaysts predict $11.34 billion.) To further add to earnings, some debt is being repaid and others are being renegotiated with longer maturities and lower rates. Currently the company has 66% of capital from debt.

Earnings should increase this year to $1.72 from 83 cents (according to the consensus from 9 analysts). Expect $1.97 in 2012. For the fourth quarter, look for 33 cents, up from 24 cents last year in the fourth period.

There's a decent dividend of 40 cents annually. That's 3.6% yield. The amount has been the same since 2007 when it was initiated. It's been paid through thick and thin, even when the company lost money in 2009. Probably won't be raised any time soon but it should definitely be paid.

Even with the lower current demand for Ti02, the company is expanding production in India and other emerging markets. With two major competitors (DuPont and Cristal Global, both larger than HUN), this should help HUN gain market share.

Essential Numbers:
- Market Cap: $2.55 billion
- Trailing P/E: 14.9
- Forward P/E: 5.44
- Price to sales ratio: .23
- Price to book: 1.42
- Operating margin: 6.46%
- Profit margin: 1.56%
- Return on equity: 10.52%
- Return on assets: 4.97%
- Revenues for the last 12 months: $11. billion
- Total cash: $453 million
- Total cash per share: $1.91
- Total debt: $4.09 billion
- Total debt to equity: 211.6%
- Current ratio: 2.18
- Book value per share: $7.64
- Beta: 2.68
- 52-week change: -20%
- Shares Outstanding: 237.78 million
- Float: 211.42 million
- Insiders own: 1.18%
- Institutions own: 67.8%

HUN is a company in transition. It's focused on restructuring so that future global recessions don't hurt as much and margins widen as sales improve. It's had a rough go this year, beaten down to levels not seen for a while. But it's on the mend. With new production in India and the restructuring, it will take a year or two to fully reap the benefits from these changes, but they should be significant. In the meantime, patient investors who can tolerate a volatile stock (a Beta of 2.68 can cause palpitations in some) will most likely receive dividend payments without interruption as they wait.

- Company Web site: www.huntsman.com

   Ted Allrich