Bull’s Eye Report: Westlake Chemical Corp. (WLK)

Westlake jumps ahead of its peers in the chemical space

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Westlake Chemical Corp. WLK Commodity Chemicals 7.3 +5.55% $85.00

Why We Like The Stock:

Westlake Chemical Corp (NYSE:WLK) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) and one of the top-performers in its Industry, Commodity Chemicals. Since the beginning of 2012, WLK has shown a much stronger uptrend than the likes of its competitors, Dow Chemical (NYSE:DOW), Rogers Corp. (NYSE:ROG), Zoltek (NASDAQ:ZOLT), and DuPont (NYSE:DD). We love trading relative outperformers, especially when a pullback opportunity presents itself. Hitting a high of $93.88 in mid-February, WLK pulled back to $85 in late February and has now based and crossed back above its short-term moving averages. Analysts are bullish on WLK as well, as evidenced by the March 1 upgrade to “overweight” at JPMorgan (NYSE:JPM). With solid support around $85, we like WLK as a short-term trade back up to ~$94, but also for a longer-term hold should its bullish technicals remain the name of the game.

We Would Be Buyers:

At the current price (~$89.85), or on a pullback to the 50-day moving average ($86.72).

Company Profile:

Westlake Chemical Corporation is a vertically integrated manufacturer and marketer of basic chemicals, vinyls, polymers and fabricated building products. The Company’s products include used chemicals in the world, which are fundamental to many diverse consumer and industrial markets, including flexible and rigid packaging, automotive products, coatings, residential and commercial construction as well as other durable and non-durable goods. The Company operates in two business segments: Olefins and Vinyls. The Company is an integrated producer of vinyls with substantial downstream integration into polyvinyl chloride (PVC), building products. As of February 17, 2012, it had 11.8 billion pounds per year of aggregate production capacity at 13 manufacturing sites in North America. The Company also has a 59% interest in a joint venture in China that operates a vinyls facility.

Stock Rating: 7.3

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Westlake – Last Three Months

WLK 1 300x168 Bulls Eye Report: Westlake Chemical Corp. (WLK)

Westlake – Last 12 Months

WLK 2 300x168 Bulls Eye Report: Westlake Chemical Corp. (WLK)

Westlake – Last Five Years

WLK 3 300x168 Bulls Eye Report: Westlake Chemical Corp. (WLK)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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