Analysts at Greenlight said at the Sohn Investment Conference in New York on Wednesday that they have taken a position in Solvay (EBR:SOLB) (SLVYY), a European chemical company.
Solvay is a Belgian company that produces and distributes chemicals and plastics, including peroxides and soda ash. It has a market cap of $2.6 billion. The company does not trade in the U.S.
Analysts told listeners that "Solvay is an essential chemical company that holds the number one position across all of its markets."
They added that while all of these markets are thought of as commodity businesses, they are, in fact, "higher margin and much more stable than most commodity chemical businesses."
Analysts commended the company's management and its financial discipline in their presentation. Additionally, they stated that the company's valuation is highly attractive.
They believe that if the company's management executes on its growth and cost targets, normal earnings per share should rise to more than €6 per share.
"All told, Solvay is a commodity chemical company with relatively high and stable margin, a higher return on capital," they stated. "At 3.7 times targeted 2028 earnings per share with almost a double-digit dividend yield, it seems too cheap," analysts added.
Additionally, it was reportedly told to CNBC that Solvay is now one of the top five positions in their portfolio.