by Travis Johnson, Stock Gumshoe | March 27, 2018 2:18 pm
Back we go to the well to take another sip of Louis Navellier[1]’s delightful bullishness — he’s got an ad out for his Blue Chip Growth[2] (currently $100/year), and it’s all about a “magic metal” that he thinks will make you rich.
This is the part that caught my eye, partway through the ad:
“This One Little Stock Could Double Every 12 Months for the Next Eight Years”
So that sounds pretty impressive, right? Is there really a stock that can do that? Can Louis Navellier pick it in advance? Let’s see what we can learn from the Mighty Mighty Thinkolator… these are the clues that launch the ad:
“Imagine…if you possessed a magic metal for making money… a magic metal that’s used in millions of everyday products… that virtually every manufacturer on the planet had to buy from you.
“What if demand for this metal was expected to triple?
“Chances are, you’d triple your wealth.
“That’s the $2 billion bet Vanguard, Blackrock, FMR, and State Street are keeping to themselves.
“No I’m not talking gold[3]…or silver[4]… or lithium[5] …but something that could be much, much bigger.
“Here’s the full story and how you can use this inside knowledge to build substantial wealth for yourself and your family—now and for years to come.”
I’m imagining! I’m imagining! In my imagination, I’m also driving a shiny red Ferrari… but since it’s my imagination, it’s got a La-Z-Boy driver’s seat with one of those electric lifts so I don’t have to crawl on the ground to get in. After all, I’m wearing fancy pants.
Where were we? Oh, right, substantial wealth is just waiting to be built… so what’s the source of this wealth for our future selves?
Navellier hints at this white powder that he calls a “magic metal”, here’s some more description of that:
“… this magic metal possesses unique properties that not only make paints whiter and keep plastics from cracking but also protect both your skin and your car’s paint from sun damage. It’s even used in the manufacture of lightweight aerospace and car parts.”
Apparently demand is surging from the automotive sector, and “analysts project demand for this magic metal to triple in the next eight years” as the number of autos on the road rises.
What else do we learn about the stock behind this “magic metal?” Here are the rest of our clues…
“Delivered four positive earnings surprises in a row….
“Seven analysts predict 11% sales growth for 2018….”
And we’re told that the company has had a 73% “run-up” over the past year.
They also must still be using the same ad copywriters, because someone at Investorplace[6] is convinced that listing the institutional holders of a stock is a compelling visual… so we see that Vanguard held 9.78% of the outstanding shares as of the end of September, for example, and Fidelity[7] 8%, among other biggies that we all recognize (as with most listings of institutional holders, it’s dominated by index fund providers who, by definition, did not select the company on its merits).
So what is this stock that’s going to surge as it provides “magic metal” to the auto sector and other customers? Thinkolator sez… Chemours (CC)
Or, if you prefer, The Chemours Company. Which is, indeed, the world’s largest producer of Titanium Dioxide — which is that “magic metal”, and the core product for the largest segment at Chemours (though it’s still responsible for less than half of revenue and earnings).
Chemours has three main divisions, and the largest drivers seem to be titanium dioxide (their product is “Ti-Pure,” on which they raised prices 20% last year), and Opteon refrigerants (which are being adopted as a next-generation replacement for hydrofluorocarbons, like Dupont/Chemours’ Freon_, though they also sell other fluoropolymers and have a relatively small chemical solutions business (performance chemicals, mining solutions, etc.)
Chemours was spun out of Dupont almost three years ago, and looked troubled for a while — Citron Research[8] even posted a scathing report about Chemours being “designed for bankruptcy”[9], partly because Andrew Left[10] claimed it was designed to let Dupont (now DowDuPont, DWDP) shed its environmental liabilities (or if you want to see a different perspective, Fortune had a profile on how Chemours came back from the brink in 2016 here[11]). The stock started a solid recovery not long after that, just about doubling in 2017 on strong earnings and guidance… with anticipated tax reform benefits provided a nice tailwind.
Chemours just this week issued new guidance for 2018, an updated outlook that puts the forecasted EBITDA and EPS at the top end of the range they had communicated earlier — on an earnings basis, that means the adjusted earnings per share should be at the top end of the range of $4.95-$5.60. So if we guesstimate $5.50 in earnings for 2018 (that’s the average number being used by analysts now), CC is trading at a forward PE of less than 9. Which is awfully compelling for a stock that is expected to grow earnings by 10% a year for the next couple years. You can see the last earnings presentation here[12].
There are some health and environment lawsuits that generate headlines for Chemours and DuPont, similar to the concerns outlined by Citron a couple years ago and mostly related to cleanup around past manufacturing sites, and I have no idea which ones might have merit or be financially significant. Moody’s announced [13]that recent perfluorochemical litigation in North Carolina and Ohio was significant enough to be “negative” for the credit profile of Chemours (and Dupont) back in February, so it’s probably not a trivial financial risk. I don’t know whether or not it’s a moral risk, that’s your call to make and I don’t know the full story of those chemical plants or the cleanup issues.
And, as with all Navellier-recommended stocks, they have indeed done a lot of “beat and raise” quarters, and the analysts have increased their estimates — those are the two data points that really stand out in Navellier’s quantitative system. Growing and surprising stocks do tend to keep growing and surprising, which is why such quantitative systems work for a while, but a “tendency” is not the same as a “guarantee,” so betting on a single stock to continue that trend is, of course, a risk. Navellier’s public “grade” for Chemours is currently a B[14], the same as it’s been since November… and you can see an older bullish commentary from Navellier about Chemours here[15] (from July — if you had bought then, you would have almost exactly mimicked the S&P’s return of about 9%).
What will the future bring? Is this specialty chemicals firm going to double every year for the next eight years, as Navellier predicts? Think the environmental liabilities will catch up with them? It’s your money, so it’s your call — let us know what you think with a comment below.
And as always, we’re collecting reader opinions about the newsletters you’ve subscribed to — so if you’ve ever taken Navellier’s Blue Chip Growth for a spin, please click here [16]to let us know what you thought. Thank you!
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GenX lawsuits may cripple Chemours, 1.4 million can’t drink the water, talk about environmental liabilities!
Yikes, a stock that can grow revenues 11%/year. Although $100/year for a subscription is relatively cheap, you certainly won’t get the cream-of the crop recos. At least not like the “god key” that exactly one month ago was supposed to explode certain stocks to Mars. After decades of trying some of these newsletters, I would have been better off saving the subscription money and putting it in the bank at .005%.
It’s all in relation to expectations — 10-11% revenue growth is fantastic for many companies, a huge disappointment to others.
With a whole lot less inbox-to-trash activity.
Morals have to come into investment at some point, at least for me they do, and I couldn’t cope with the shaving mirror if I ever put a cent into anything with even the remotest connection, present or past, to Bhopal. I do not have enough information to discriminate between the various entities which have connections to that crime and the cowardly response to it, and therefore I just pass on anything which has, or might have, anything to do with it. Perhaps I’m calling this shot wrong, in which case feel free to shoot me down in flames. Wouldn’t be the first time. Truth is, I see so much damage being done I wonder about investing in anything these days.
Invest in ammo then…
When the SHTF it will be worth more in barter than gold…or steak for that matter. If you don’t own a gun and aren’t killed outright for your belongings, some popular rounds are .22’long rifle’, .223/5.56mm(AR-15) and the .762(Ak47). If you have the space, you can still horde smokeless powder for reloading.
I’m not kidding at all.
It will only take ONE nuke, set off high above us, and our entire way of life will vanish overnight. The PRNK is only the last country to get this ability and we haven’t been makin many friends lately.?
Being prepared might not save you but it it won’t hurt… don’t kid yourself, starving people have no friends…or families for that matter.
To live in fear is the same as already being dead.
By all means, stockpile food & weapons & huddle in the basement – or even better your fallout shelter – to await the end. “Just because you’re paranoid doesn’t mean they’re not out to get you!”
Google ‘Normalcy Bias” just for giggles.
Never quite understood…if it is that bad why would you be motivated to survive…no hospitals, electricity, etc. You are alive, that is all, and for how much longer?
Don’t need to worry about pollution legislation. When they are done gutting the EPA, the only criteria to let companies off the hook will be whether they are profitable or not!
If there are no trees and leaves or birds or animals…I’d rather be on the other side of the dirt. I do reload however for my beautiful custom 308.
CC has returned Blue Chip subscribers about 6.4% since Navellier’s June 2017 recommendation. I remember reading the pitch and it just didn’t interest me. But Navellier’s recommendations for Blue Chip did reasonably well in 2017. I suppose most folks did well. As for an investor, I am still way behind but trying. As for perfluorochemical issues, well, I do have a lot of background in the environmental analysis and mitigation. As a member of the analysis and cleanup side, I love it. If I were a client, I’d be terrified of the costs. Even if you think you have it addressed, you’ll be on the hook for another 20 years monitoring it. CC just did not interest me, long term liability bothers me and I gave up on magic dust 40 years ago.
Sounds like enviro/cleanup is a growth industry?
Magic metal: Perhaps a flutter on Argex Titanium Inc. RGX (TSX) at C$ 0.05/share might be a lot more fun and possibly more profitable
Innerestin but not really following chemicals so haven’t done enough DD to have a meaningful comment. Considering the growth potential in pot, prescious metals and tech I dont see my changing any allocation as a result of this, though it was good coverage. Nice work Travis.
Pot…ADVT
Prescious Metals…AG/SAND
Tech…LQMT
These are my current favs but the basket is bigger…to much bigger maybe. I smell bears.
RSSFF (Affinor Growers) is a publicly traded company TRI-LISTED in the USA, Canada, and Germany that is committed to becoming a pre-eminent supplier and grower, using exclusive VERTICAL FARMING techniques that truly utilize technology for growing better food.
Might be a good one. Was halted today for the above reason. I just bought it 2 days ago.
What do you mean “was Halted today for the above reason”?
“Nice work Travis” is redundant. 🙂
Maybe the reason no one is talking about titanium dioxide is that it’s a snooze commodity…sort of like watching paint dry. (OK, bad pun,)
Seems as if The Chemours Company (CC) has attracted some attention lately. Apart for Louis Navalier (who will pitch anything to sell his publications) it has attracted buy signals from Zacks, initiated by Morgan Stanley late Jan 2018 as well as buy ratings recently from three Tipranks analysts. As per Travis fundamentals seem fine, good value with forward P / E @ ± 9 and PEG @ 0.58 but technicals are worrisome. Amongst others trading below 200 MA with real possibility of imminent “death cross” pattern (i.e. when 50 MA crosses 200 MA). In my humble opinion will wait for some upward momentum before considering entering ….
boy did you ever hit that on the head! done it twice
Same Mr. Navellier seems desperate – trying to sell me 2 years of Dividend Growth for $59.
I just watched his latest internet pitch for breakthrough stocks. At the end he asks for $1,700 or so. I had to laugh. At his website the same service sells for a thousand. His free pick was a $250 stock. And this just after saying his picks were $10 and under. No thank you.
I fail to see why Navellier thinks there will be a huge surge in Titanium demand. I was in LN:KMR (100% Ti sands) a decade ago, it haa lost 95% of its value in the last 5 years
Jeezus, this Navellier guy pops up everywhere, like Eggo waffles. But not nearly as reliable, even if slathered with syrup. Now he’s in with stansberry selling a $1995 newsletter peddling the usual crap. I’m a Stansberry Alliance member, since this newsletter isn’t included with the lifetime access to “All of our research products “, I won’t buy it, if only as a matter of principle.
I noticed that Louis Navellier got whacked with fraud charges by the SEC last year. I am not surprised.
Wow, I looked back and see they were recommending this around what’s now it’s five-year high, around $50 a share…it’s now just above $10 – might be a buy there. 🙂