Research from Water Tower Research, Water Tower Research

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>Balancing act. As the ag industry is preparing for the planting season, an early look at 2025 expectations by Farm Journal’s Ag Economists’ Monthly Monitor offers a mixed bag.</li><li>On one hand, after a two-year decline, net and cash farm income are expected to increase Y/Y in 2025.</li><li>On the other hand, the increase will be mostly due to an increase in government payments. </li></ul>

Balancing act. As the ag industry is preparing for the planting season, an early look at 2025 expectations by Farm Journal’s Ag Economists’ Monthly Monitor offers a mixed bag.On one hand, after a two-year decline, net and cash farm income are expected to increase Y/Y in 2025.On the other hand, the increase will be mostly due to an increase in government payments. 

Mat-Chem Notes - Tariff Concerns Proliferate as Geopolitics Remain Center Stage

<ul><li>WTR-CMI in 2024. Last year was difficult for specialty chemicals and materials stocks, with our WTR-CMI Index posting a rather modest 5% gain for the year, affected by &gt;40% Y/Y declines in lithium stocks.</li><li>The index’s performance was well off the pace of the Russell 2000 and S&amp;P 500, which posted returns of 10.8% and 24%, respectively, driven by the extraordinary gains of the “magnificent seven” tech and media stocks.</li><li>On a positive note, RYAM’s stock price nearly doubled during the year, driven by an <span style="font-size: var(--content-font-size);">improving pricing environment, better sales mix, and cost </span>containment efforts, as well as the ramp-up of the company’s Biomaterials business. </li></ul>

WTR-CMI in 2024. Last year was difficult for specialty chemicals and materials stocks, with our WTR-CMI Index posting a rather modest 5% gain for the year, affected by &gt;40% Y/Y declines in lithium stocks.The index’s performance was well off the pace of the Russell 2000 and S&amp;P 500, which posted returns of 10.8% and 24%, respectively, driven by the extraordinary gains of the “magnificent seven” tech and media stocks.On a positive note, RYAM’s stock price nearly doubled during the year, driven by an improving pricing environment, better sales mix, and cost containment efforts, as well as the ramp-up of the company’s Biomaterials business. 

Mat-Chem Notes - Looking Ahead by Looking Back at 2024

<ul><li>WTR-CMI last week. After the momentous US election, the stock market has rallied on expectations of lower regulations, lower taxes, and a more confrontational approach to China and other geopolitical adversaries.</li><li>Last week saw some profit taking across the market, with the Russell 2000, which we view as a better proxy for the broader market, declining 4%, with the large- cap, tech-heavy S&amp;P 500 posting a 2.1% decline.</li><li>Our WTR-CMI Index of 30 specialty chemicals and materials companies fared similarly, losing 2.2% of its value. </li></ul>

WTR-CMI last week. After the momentous US election, the stock market has rallied on expectations of lower regulations, lower taxes, and a more confrontational approach to China and other geopolitical adversaries.Last week saw some profit taking across the market, with the Russell 2000, which we view as a better proxy for the broader market, declining 4%, with the large- cap, tech-heavy S&amp;P 500 posting a 2.1% decline.Our WTR-CMI Index of 30 specialty chemicals and materials companies fared similarly, losing 2.2% of its value. 

Mat-Chem Notes - Growth Remains Elusive as Geopolitics of Battery Metals Heats Up

<ul><li>Elections have consequences. The November 2024 elections in the US have ushered in not just a change in political landscape for the country and the makeup of the federal government but are likely to result in material changes to government policies and priorities for 2025 and beyond.</li><li>These include international trade, the federal regulatory environment, and tax policies that can affect consumer sentiment, company strategies when it comes to capital deployment, and end market dynamics.</li><li>While specifics could emerge in the coming months, we expect modest inflationary pressures from expected tariffs on imported goods to be largely offset by more constructive energy policies, tax incentives, and a reduced federal regulatory burden, along with a reduced federal government role in economic decision-making to lead to an improvement in economic growth in 2025.</li></ul>

Elections have consequences. The November 2024 elections in the US have ushered in not just a change in political landscape for the country and the makeup of the federal government but are likely to result in material changes to government policies and priorities for 2025 and beyond.These include international trade, the federal regulatory environment, and tax policies that can affect consumer sentiment, company strategies when it comes to capital deployment, and end market dynamics.While specifics could emerge in the coming months, we expect modest inflationary pressures from expected tariffs on imported goods to be largely offset by more constructive energy policies, tax incentives, and a reduced federal regulatory burden, along with a reduced federal government role in economic decision-making to lead to an improvement in economic growth in 2025.

The US Elections' Impact on 2025 Outlook - November 13, 2024

<ul><li>WTR-CMI this week. In a tough week for the market, the WTR- CMI Index of 30 specialty chemicals and materials technology stocks dipped 0.6%, while the large-cap heavy S&amp;P 500 declined 1.4%, with the Russell 2000 inching up 0.1%.</li><li>Strong rebounds in NGVT, ECVT, LAC, PLL, and AXTA nearly offset sharp declines in EAF, CMP, and HXL. YTD, our index is slightly outperforming the Russell 2000, increasing 10.4% versus the broader index’s 9.0% improvement, although both trail the S&amp;P 500’s 20.1% increase.</li><li>On a Y/Y basis, the WTR-CMI Index has narrowed the performance gap with the S&amp;P 500, improving 32.9% versus the large-cap index’s 35.2% appreciation, with the Russell 2000 bringing up the rear with a 32.4% rebound.</li></ul>

WTR-CMI this week. In a tough week for the market, the WTR- CMI Index of 30 specialty chemicals and materials technology stocks dipped 0.6%, while the large-cap heavy S&amp;P 500 declined 1.4%, with the Russell 2000 inching up 0.1%.Strong rebounds in NGVT, ECVT, LAC, PLL, and AXTA nearly offset sharp declines in EAF, CMP, and HXL. YTD, our index is slightly outperforming the Russell 2000, increasing 10.4% versus the broader index’s 9.0% improvement, although both trail the S&amp;P 500’s 20.1% increase.On a Y/Y basis, the WTR-CMI Index has narrowed the performance gap with the S&amp;P 500, improving 32.9% versus the large-cap index’s 35.2% appreciation, with the Russell 2000 bringing up the rear with a 32.4% rebound.

Mat-Chem Notes - Supply-Demand Balancing Act and Geopolitics of Energy Transition

United States

RPM International, Inc. manufactures, markets, and sells various specialty chemical product lines. The Company's product lines include specialty paints, protective coatings and roofing systems, sealants and adhesives, focusing on the maintenance needs of both the industrial and consumer markets.

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Rpm International (RPM US)

Mat-Chem Notes - Tariff Concerns Proliferate as Geopolitics Remain Center Stage

Balancing act. As the ag industry is preparing for the planting season, an early look at 2025 expectations by Farm Journal’s Ag Economists’ Monthly...

Water Tower Research

Mat-Chem Notes - Looking Ahead by Looking Back at 2024

Last year was difficult for specialty chemicals and materials stocks, with our WTR-CMI Index posting a rather modest 5% gain for the year, affected...

Water Tower Research

Mat-Chem Notes - Growth Remains Elusive as Geopolitics of Battery Metals Heats Up

After the momentous US election, the stock market has rallied on expectations of lower regulations, lower taxes, and a more confrontational...

Water Tower Research

The US Elections' Impact on 2025 Outlook - November 13, 2024

While specifics could emerge in the coming months, we expect modest inflationary pressures from expected tariffs on imported goods to be largely...

Water Tower Research

Mat-Chem Notes - Supply-Demand Balancing Act and Geopolitics of Energy Transition

In a tough week for the market, the WTR- CMI Index of 30 specialty chemicals and materials technology stocks dipped 0.6%, while the large-cap heavy...

Water Tower Research

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