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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

vs
industry
vs
history
Cash to Debt 0.28
PAH's Cash to Debt is ranked higher than
54% of the 1441 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 0.50 vs. PAH: 0.28 )
PAH' s 10-Year Cash to Debt Range
Min: 0.2   Max: No Debt
Current: 0.28

Equity to Asset 0.54
PAH's Equity to Asset is ranked higher than
68% of the 1261 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 0.49 vs. PAH: 0.54 )
PAH' s 10-Year Equity to Asset Range
Min: 0.22   Max: 0.54
Current: 0.54

0.22
0.54
Z-Score: 0.81
WACC vs ROIC
1.06%
0.45%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 3/10

vs
industry
vs
history
Operating margin (%) 1.13
PAH's Operating margin (%) is ranked higher than
50% of the 1429 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 5.82 vs. PAH: 1.13 )
PAH' s 10-Year Operating margin (%) Range
Min: 1.13   Max: 15.74
Current: 1.13

1.13
15.74
Net-margin (%) -3.55
PAH's Net-margin (%) is ranked lower than
58% of the 1431 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 3.97 vs. PAH: -3.55 )
PAH' s 10-Year Net-margin (%) Range
Min: -3.55   Max: 6.29
Current: -3.55

-3.55
6.29
ROE (%) -2.24
PAH's ROE (%) is ranked lower than
56% of the 1416 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 7.86 vs. PAH: -2.24 )
PAH' s 10-Year ROE (%) Range
Min: -2.19   Max: 33.72
Current: -2.24

-2.19
33.72
ROA (%) -1.20
PAH's ROA (%) is ranked lower than
55% of the 1451 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 3.83 vs. PAH: -1.20 )
PAH' s 10-Year ROA (%) Range
Min: -1.03   Max: 7.45
Current: -1.2

-1.03
7.45
ROC (Joel Greenblatt) (%) 2.06
PAH's ROC (Joel Greenblatt) (%) is ranked higher than
51% of the 1443 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 10.62 vs. PAH: 2.06 )
PAH' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 1.4   Max: 99.98
Current: 2.06

1.4
99.98
» PAH's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q2 2014

PAH Guru Trades in Q2 2014

Paul Tudor Jones 15,347 sh (New)
Murray Stahl 5,535,819 sh (+55.81%)
John Griffin 9,000,000 sh (+12.50%)
Bill Ackman 33,333,330 sh (unchged)
Leon Cooperman Sold Out
Louis Moore Bacon Sold Out
Whitney Tilson 155,915 sh (-31.44%)
Ron Baron 2,250,000 sh (-32.50%)
» More
Q3 2014

PAH Guru Trades in Q3 2014

Murray Stahl 6,156,378 sh (+11.21%)
John Griffin 9,000,000 sh (unchged)
Bill Ackman 33,333,330 sh (unchged)
Paul Tudor Jones Sold Out
Ron Baron 2,000,000 sh (-11.11%)
Whitney Tilson 130,615 sh (-16.23%)
» More
Q4 2014

PAH Guru Trades in Q4 2014

Jim Simons 19,900 sh (New)
Whitney Tilson 192,065 sh (+47.05%)
Bill Ackman 42,737,394 sh (+28.21%)
John Griffin 10,953,888 sh (+21.71%)
Bill Ackman 42,737,394 sh (+12.37%)
John Griffin 10,953,888 sh (unchged)
Ron Baron 2,000,000 sh (unchged)
Bill Ackman 42,737,394 sh (unchged)
Murray Stahl 6,053,765 sh (-1.67%)
» More
2015

PAH Guru Trades in 2015

Bill Ackman 42,737,394 sh (unchged)
» More
» Details

Insider Trades

Latest Guru Trades with PAH

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Guru Investment Theses on Platform Specialty Products Corp

Murray Stahl’s Horizon Kinetics Comments on Platform Specialty Products - Jun 26, 2014

A recent purchase in certain strategies is Platform Specialty Products (PAH). Like Wendy’s (WEN), this stock does not trade at a presently low price-to-earnings, or P/E ratio; in fact, it’s somewhat high. However, the company incorporates many predictive attributes that are suggestive that its revenues and earnings several years from now will be far higher than they are today. As a U.S. company, PAH is new, having been listed on the NYSE only since this past January. Its operating business, though, has been around for over 90 years, and PAH was trading on the London Stock Exchange when it was acquired this past October for $1.8 billion by what is known as a blank-check company. The current stock market value is $2.4 billion. A blank check company raises equity capital in order to acquire a target, often within a specified window of time, and this particular one was organized by three well- known parties: Nicolas Beggruen, through his investment company Beggruen Holdings; Bill Ackman, through his hedge fund Pershing Square; and Martin Franklin. At year-end they each controlled, respectively, 6.5 million, 33.3 million, and 7.3 million shares. Martin Franklin is also the founder and Executive Chairman of Jarden Corp (JAH), which is a significant holding in the Core Value and Strategic Value strategies, among others. The same three, also through a blank check company, brought Burger King (BKW) public again in mid-2012.



PAH produces specialty chemicals for a wide range of industries. It manufactures over 1,000 compounds, and its largest customer represents only 3% of sales. It exhibits very little cyclicality. Energy costs are only 2% of sales. It’s important to qualitatively differentiate the nature of the PAH chemicals business from that of the typical chemicals company. These particular chemicals are often proprietary both as to makeup (the company has over 750 patents) and process. Their employees spend considerable time with customers guiding them as to how to use these chemicals, often in multi-step processes, such as might be used to enhance the performance of a circuit board. PAH refers to these as dynamic chemistries and seeks out markets requiring highly technical post-sale customer service. What PAH sells tend to represent a very small portion of the cost of a customer’s product, yet are important to the product’s function or appearance. According to the company, customer retention is very high because the cost savings from switching to another provider are modest, while the switching costs are high due to process complexities and quality control requirements.



All of these attributes differentiate PAH from commodity chemical providers. Perhaps the most obvious way to observe this is via the balance sheet: whereas total assets are $2.2 billion, property, plant and equipment are only $140 million. Now, the balance sheet is distorted because of $1.7 billion of goodwill and intangible assets; nevertheless, $140 million of production assets is inordinately small relative to $750 million of annual revenue and $383 million of current assets. Accordingly, PAH has more of the character of a branded products business than of a commodity business. If so, it should have greater than average pricing power and modest capital expenditure requirements, which should also be reflected in the financial statements, which they are: capital expenditures are only about $10 million per year, such that free cash flow is about equal to net income, and the 2013 free cash flow margin was about 11.8%. As a point of comparison, to pick a branded consumer products company, General Mills (GIS) had a 9.4% net profit margin last year.



The reason the proprietary-product character of PAH is intriguing is because it bears certain commonalities with Jarden Corp., which is a branded products company. Jarden, which we’ve reviewed in the past, has been a very skilled acquirer and integrator of branded products, its portfolio comprised exclusively of either the leading market share products in their categories or the second largest market share. These range from Bee and Bicycle playing cards to Bionaire, Mr. Coffee, Oster and Sunbeam home and kitchen appliances, to Aerobed mattresses, Coleman camping gear, and on and on. Mr. Franklin’s curricula vitae at Jarden include these two statistics: book value per share, from 2001, when he assumed control, through 2013, expanded at a 26.4% annual rate; earnings per share have increased at a 20.2% rate.



The relevance of the relationship of Jarden and Mr. Franklin to the PAH investment thesis is this: it was a stated goal of the blank check company to identify a suitable target not merely to acquire it but also to use it as a platform for additional acquisitions in its industry. PAH, as a company that has relatively proprietary products and which generates relatively high free cash flow, can afford to fund additional acquisitions. Many large companies in recent years, in order to demonstrate a single-minded focus on their core business lines and maximize their returns on capital, have been spinning off or otherwise divesting lesser or ancillary divisions. The chemicals industries are no exception. The buyers have been entrepreneurs and private equity firms. A sterling example of just such a strategy well executed, aside from Jarden, is Colfax Corp. (CFX), established by the Rales brothers, and which came public in 2008. It is also a holding in Core Value and Strategic Value. Not a quarter goes by without one or more acquisitions, in their case, of generally modest-size industrial companies that manufacture gas- and fluid-handling products and services. If you simply look at the 5-or 6-year price chart, you get the picture.



In this instance, the qualitative assessment is of particular importance. The thesis is that Mr. Franklin will oversee a series of acquisitions, priced well, integrated effectively, eventually with the further benefit of scale economies, and that there will be a suitably large supply of acquisition candidates. If this thesis bears fruit, one can readily see that in success mode PAH can be far, far larger in the foreseeable, though not near, future. The rewards for the patient would be suitable.



From Murray Stahl‘s First Quarter 2014 Market Commentary.



Check out Murray Stahl latest stock trades

Top Ranked Articles about Platform Specialty Products Corp

Whitney Tilson's Top Five Q2 Stocks
Whitney Tilson is the founder and managing partner of T2 Partners and the Tilson Mutual Funds. Along with managing these funds he also authored several investing books as well as numerous articles for "Forbes" and similar money magazines. The guru is an author and a disciple of the Graham-Dodd-Buffett-Munger school of value investing.
Read more...
Murray Stahl’s Horizon Kinetics Comments on Platform Specialty Products
A recent purchase in certain strategies is Platform Specialty Products (PAH). Like Wendy’s (WEN), this stock does not trade at a presently low price-to-earnings, or P/E ratio; in fact, it’s somewhat high. However, the company incorporates many predictive attributes that are suggestive that its revenues and earnings several years from now will be far higher than they are today. As a U.S. company, PAH is new, having been listed on the NYSE only since this past January. Its operating business, though, has been around for over 90 years, and PAH was trading on the London Stock Exchange when it was acquired this past October for $1.8 billion by what is known as a blank-check company. The current stock market value is $2.4 billion. A blank check company raises equity capital in order to acquire a target, often within a specified window of time, and this particular one was organized by three well- known parties: Nicolas Beggruen, through his investment company Beggruen Holdings; Bill Ackman, through his hedge fund Pershing Read more...

Ratios

vs
industry
vs
history
Forward P/E 12.36
PAH's Forward P/E is ranked higher than
89% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 0.00 vs. PAH: 12.36 )
N/A
P/B 0.70
PAH's P/B is ranked higher than
92% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 2.26 vs. PAH: 0.70 )
PAH' s 10-Year P/B Range
Min: 0.7   Max: 1.04
Current: 0.7

0.7
1.04
P/S 4.36
PAH's P/S is ranked higher than
51% of the 1593 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 1.22 vs. PAH: 4.36 )
PAH' s 10-Year P/S Range
Min: 1.7   Max: 6.11
Current: 4.36

1.7
6.11
PFCF 18.00
PAH's PFCF is ranked higher than
83% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 158.30 vs. PAH: 18.00 )
PAH' s 10-Year PFCF Range
Min: 11.8   Max: 58.08
Current: 18

11.8
58.08
POCF 14.52
PAH's POCF is ranked higher than
72% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 17.03 vs. PAH: 14.52 )
PAH' s 10-Year POCF Range
Min: 16.86   Max: 52.28
Current: 14.52

16.86
52.28
EV-to-EBIT 249.34
PAH's EV-to-EBIT is ranked higher than
54% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 23.80 vs. PAH: 249.34 )
PAH' s 10-Year EV-to-EBIT Range
Min: 25.2   Max: 76.6
Current: 249.34

25.2
76.6
Current Ratio 6.51
PAH's Current Ratio is ranked higher than
97% of the 1273 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 1.73 vs. PAH: 6.51 )
PAH' s 10-Year Current Ratio Range
Min: 2.92   Max: 6.51
Current: 6.51

2.92
6.51
Quick Ratio 5.66
PAH's Quick Ratio is ranked higher than
97% of the 1273 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 1.14 vs. PAH: 5.66 )
PAH' s 10-Year Quick Ratio Range
Min: 2.33   Max: 5.66
Current: 5.66

2.33
5.66
Days Inventory 72.82
PAH's Days Inventory is ranked higher than
65% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 73.05 vs. PAH: 72.82 )
PAH' s 10-Year Days Inventory Range
Min: 36.92   Max: 115.19
Current: 72.82

36.92
115.19
Days Sales Outstanding 141.68
PAH's Days Sales Outstanding is ranked higher than
52% of the 1594 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 69.83 vs. PAH: 141.68 )
PAH' s 10-Year Days Sales Outstanding Range
Min: 69.37   Max: 141.68
Current: 141.68

69.37
141.68

Valuation & Return

vs
industry
vs
history
Earnings Yield (Greenblatt) 0.40
PAH's Earnings Yield (Greenblatt) is ranked lower than
55% of the 1424 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 4.80 vs. PAH: 0.40 )
PAH' s 10-Year Earnings Yield (Greenblatt) Range
Min: 0.4   Max: 4
Current: 0.4

0.4
4

Business Description

Industry: Chemicals » Specialty Chemicals
Compare: » details
Traded in other countries:PAH.UK,
Platform Specialty Products Corp incorporated with limited liability under the laws of the British Virgin Islands on April 23, 2013. The Company's businesses include the manufacture of a broad range of specialty chemicals, which it create by blending raw materials, and the incorporation of these chemicals into multi-step technological processes. These specialty chemicals and processes together encompass the products and sells in the electronics, metal and plastic plating, graphic arts, and offshore oil production and drilling industries. The Company has two operating segments: a Performance Materials segment and a Graphic Solutions segment. Performance Materials segment manufactures and markets dynamic chemistry solutions that are used in the electronics, automotive and oil and gas production and drilling industries. Its products include surface and coating materials and water-based hydraulic control fluids. The Graphic Solutions segment primarily produces and markets photopolymers through an extensive line of flexographic plates that are used in the commercial packaging and printing industries. It manufacture photopolymers used to produce printing plates for transferring images onto commercial packaging, including packaging for consumer food products, pet food bags, corrugated boxes, labels and beverage containers.
» More Articles for PAH

Headlines

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