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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>WTR-CMI last week. In what was a mixed week for the market, with S&amp;P 500 appreciating 0.9% and the Russell 2000 slipping 1.3%, our WTR-CMI index of 30 specialty chemicals and materials stocks outperformed both broader indexes by appreciating 1.1%, led by a recovery in prices of lithium stocks, which took a tumble the previous week after the announcement of the Chilean government’s intention to increase its financial participation in large lithium projects in the country.</li><li>Better weather drives stronger planting progress. Following last year’s planting delays caused by unseasonal weather, the 2023 planting season in the US is picking up the pace after a slower start, with both corn and soybean planting well ahead of last year and the five-year average, boding well for North American crop protection and the fertilizer market, at least when it comes to demand.</li><li>Chinese auto sales look to rise. According to the China Automobile Dealers Association, the country should see a 50% surge in Y/Y new passenger vehicle sales in April, following a strong March, compared with the COVID lockdown period a year ago.</li></ul>

WTR-CMI last week. In what was a mixed week for the market, with S&amp;P 500 appreciating 0.9% and the Russell 2000 slipping 1.3%, our WTR-CMI index of 30 specialty chemicals and materials stocks outperformed both broader indexes by appreciating 1.1%, led by a recovery in prices of lithium stocks, which took a tumble the previous week after the announcement of the Chilean government’s intention to increase its financial participation in large lithium projects in the country.Better weather drives stronger planting progress. Following last year’s planting delays caused by unseasonal weather, the 2023 planting season in the US is picking up the pace after a slower start, with both corn and soybean planting well ahead of last year and the five-year average, boding well for North American crop protection and the fertilizer market, at least when it comes to demand.Chinese auto sales look to rise. According to the China Automobile Dealers Association, the country should see a 50% surge in Y/Y new passenger vehicle sales in April, following a strong March, compared with the COVID lockdown period a year ago.

Mat-Chem Notes : For the Week Ended April 28, 2023

<ul><li>WTR-CMI last week. In what was a mixed week for the market, with the Russell 2000 appreciating 0.6% and the S&amp;P 500 remaining virtually unchanged at (0.1%), our WTR-CMI index of 30 chemicals and materials technology stocks underperformed, declining 0.3%, as lithium stocks led by ALB suffered from Chile’s decision to nationalize its lithium mining industry, once existing contracts with private companies (mainly SQM and ALB) expire.</li><li>SHW exits another paint market. When the company acquired Valspar, it did not only shore up its presence in the North American big-box distribution channel and expand its industrial coatings business, but it also gained exposure to non-North American paint markets, specifically China and Australia.</li><li>SHW divested the Australian business two years ago and now has also found a buyer (Akzo) for its Chinese paint business, which may have contributed to SHW topping the list of WTR-CMI stocks appreciating last week.</li></ul>

WTR-CMI last week. In what was a mixed week for the market, with the Russell 2000 appreciating 0.6% and the S&amp;P 500 remaining virtually unchanged at (0.1%), our WTR-CMI index of 30 chemicals and materials technology stocks underperformed, declining 0.3%, as lithium stocks led by ALB suffered from Chile’s decision to nationalize its lithium mining industry, once existing contracts with private companies (mainly SQM and ALB) expire.SHW exits another paint market. When the company acquired Valspar, it did not only shore up its presence in the North American big-box distribution channel and expand its industrial coatings business, but it also gained exposure to non-North American paint markets, specifically China and Australia.SHW divested the Australian business two years ago and now has also found a buyer (Akzo) for its Chinese paint business, which may have contributed to SHW topping the list of WTR-CMI stocks appreciating last week.

Mat-Chem Notes : For the Week Ended April 21, 2023

United States

Piedmont Lithium Inc operates as a mineral exploration company. The Company explores and develops lithium projects, as well as manages drill, land expansion, and sampling programs. Piedmont Lithium serves customers worldwide.

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Piedmont Lithium (PLL US)

Mat-Chem Notes : For the Week Ended April 28, 2023

WTR-CMI last week. In what was a mixed week for the market, with S&P 500 appreciating 0.9% and the Russell 2000 slipping 1.3%

Water Tower Research

Mat-Chem Notes : For the Week Ended April 21, 2023

In what was a mixed week for the market, with the Russell 2000 appreciating 0.6% and the S&P 500 remaining virtually unchanged at (0.1%)

Water Tower Research

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