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Reuters Company ResearchChemtura Corporation (CEMJQ)
02 Sep 2009
Performance Rating: Outperform
1999 2009
Share Price Summary Overview Percent Price Change CEMJQ S&P 500
Close Price on 9/2/09............................................. $0.75 Float (mil)........................................................... 241.100 Year to Date...............................-46.43.......... 10.13 Absolute Price Change on 9/2/09.............................-0.01 10 Day Average Volume (mil)...................................3.352 One Year...................................-88.39.........-21.98Percent Change....................................................-1.32% 1 Day Volume Change on 9/2/09.........................-69.74% Two Years................................. -91.86.........-32.51Off 52-Week High...............................................-88.81% Market Capitalization (mil).........................................$182 Three Years...............................-91.36.........-24.12Over 52-Week Low.......................................... 4587.50% TTM Price/Earnings......................................................NA Five Years..................................-90.03.........-10.67Beta............................................................................NA Price/Earnings Current Fiscal Year Estimate...................NA Ten Years..................................-95.52.........-26.71
Table of Contents
Reuters Rating ....................................... 2Getting Acquainted .................................3Share Price Trends .................................4General Sentiment ..................................5Stock Price Rationale ..............................6Expectations and Credibility .....................7Footprints of Success ............................. 8
REUTERS COMPANY REPORT DISCLAIMER
This research report is provided for informational purposes only and on the condition that it will not form the sole basis for any investment decision. Reference to any company is not a recommendationto buy or sell the shares of such company. The information used for, or presented in, this report has been obtained from sources believed to be reliable, but Reuters makes no representation as to theaccuracy or completeness of such information. This report in intended only for users in the United States. Reuters has no obligation to update, modify or amend this report or to otherwise notify a readerthereof in the event that any matter stated herein becomes inaccurate. Reuters and/or its affiliates/investors may hold securities positions in the companies discussed in this report and may frequentlytrade in such positions. Such investments may be inconsistent with the quantitative analysis provided in this report.This report was generated using a proprietary quantitative model that leverages widely accepted statistical methods and financial concepts to rank and rate a universe of more than 4700 US companiesand US-listed ADRs with a market capitalization greater than $50mm based on a series of financial attributes. These ratings are not intended as an indication of how an individual's investment willperform. As used in this report,
"Outperform"
designates the companies that rank in the top 30% of companies covered by Reuters,
"Neutral"
designates the middle 40%, and the bottom 30% aredesignated
"Underperform"
. All ratings are relative to the universe of companies covered by Reuters and not to any specific benchmark.© Reuters 2004. All rights reserved. This report may not be reproduced, modified, distributed or published without the prior written authorization of Reuters. Reuters and the sphere logo are thetrademarks or registered trademarks of the Reuters Group of companies around the world.
 
Reuters Composite Rating
We cannot guarantee that each stock will performin accordance with its rank. But we do believe thatover the long term, stocks rated Outperform (30%of all stocks we rate) will, in the aggregate,outperform stocks rated Neutral (40% of all stockswe rate), and that stocks rated Neutral will, in theaggregate, outperform stocks rated Underperform(30%). All analysis is based on publicly availablecompany financials, fundamental ratios, relativerankings of financial data and ratios, and observedsecurity prices.
Underperform Neutral Outperform
CEMJQ shares are presently rated OUTPERFORM.No forecast is made for the stock market as a whole.However, we do believe that whichever way the marketmoves, stocks rated OUTPERFORM have, in theaggregate, a higher probability of performing better thanmost others.
Component Rating
FundamentalQuality
  O  u   t  p  e  r  f  o   r  m   N  e  u   t  r  a   l   U  n  d  e  r
TechnicalFactors
O   u  t    p  e  r  f   o  r  m  N   e  u  t   r  a  l   U   n  d   e  r  
ValueCatch-up
O   u  t    p  e  r  f   o  r  m  N   e  u  t   r  a  l   U   n  d   e  r  
OperationalTrends
  O  u   t  p  e  r  f  o   r  m   N  e  u   t  r  a   l   U  n  d  e  r
"Under" = Underperform
Component Weight
Types of investment criteria differ in how usefulthey are for predicting future stock movement.Based on our research, the Composite Rankassumes these relative degrees of importance.
Fundamental Quality 36%Technical Factors 27%Operational Trends 13%Value Catch-up 24%
Technical Factors:Neutral
This rating is based on analyses of share pricemovements over a variety of time periods. Wecompare performance characteristics of individualstocks with those of all the others we rate.Generally speaking, our goal is to favor up-trendingshares that have experienced recent correctionsand de-emphasize down-trending sharesexperiencing uncharacteristic periods of strength.Here is how CEMJQ shares performed during thevarious periods we examined.
Price Change
Past 7 days
7.1%
Past 30 days
56.3%
Past 60 days
224.7%
Change for Past 180 Days:177.8%
Open on 3/9/09 Close on 9/2/09$0.27$0.75
Change Between 60 and 30 Days Ago:107.8%
Open on 7/6/09 Close on 8/4/09$0.23$0.48
Change Between 180 and 60 Days Ago:-14.4%
Open on 3/9/09 Close on 7/2/09$0.27$0.23
Change Between 180 and 90 Days Ago:37.0%
Open on 3/9/09 Close on 6/5/09$0.27$0.37
Fundamental Quality Component:Outperform
This rating is based on characteristics traditionally associated with "good" companies. We focus on how each companymeasures up against others, and give careful attention to recent improvement or slippage relative to other companies.TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
TTM Return on Investment
 
Improvement in TTM Return on Investment
 
TTM Pretax Margin
 
Improvement in TTM Pretax Margin
 
Depreciation in Excess of Capital Spending Needs
 
Issuance/Repurchase of Common Shares
 
Common Shares Dilution
 
Presence/Absence of Unusual Income Items
 
Value Catch-up Component:Outperform
This rating measures the extent to which the share price adequately reflects improving or eroding fundamentals, and favorsshares whose prices have been slower to "catch up" to improving performance measures. TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
Price Catch-up with TTM Earnings
 
Price Catch-up to TTM Sales
 
Price Catch-up to TTM Free Cash Flow
 
Price Catch-up to MRQ Book Value
 
Operational Trends Component:Neutral
This rating reflects how strong a company's recent Sales and EPS (reported as per GAAP) growth have been relative to othercompanies we rate. MRQ = Most Recent Quarter. TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
Most Recent Quarter EPS Growth
 
Improvement in EPS Growth for Consecutive Quarters
 
Improvement in EPS Growth (MRQ vs. TTM)
 
Most Recent Quarter Sales Growth
 
Improvement in Sales Growth (MRQ vs. TTM)
 
Peer Comparison
This section shows the comparison of key components between CEMJQ and several of its peers.
Company Name (Ticker)CompositeRatingFundamentalQualityTechnicalFactorsValueCatch-upOperationalTrendsChemtura Corpor... (CEMJQ)Outperform OutperformNeutralOutperformNeutral
BASF SE (BAS) NA NA NA NA NABayer AG (BAY) NA NA NA NA NAEastman Chemical Compan... (EMN)NeutralOutperform OutperformUnderperform Underperform Ciba Holding Inc. (CIBN) NA NA NA NA NA Albemarle Corporation (ALB)UnderperformNeutral NeutralUnderperform Underperform
Chemtura Corporation (OTC:CEMJQ) -- Chemical Manufacturing/Basic MaterialsReuters Company Research
Performance Rating: Outperform
Reuters ratings are based on a proprietary model that leverages widely accepted statistical methods and financial concepts to select attributes shown to be strong indicators of futurestock price performance and applies these to rank stocks along a normal distribution curve. Ranks for Fundamental Quality, Value Catch-up, Operational Trends and Technical Factorsare combined into a Composite Rating of Outperform, Neutral or Underperform.
September 2, 2009 Page 2
 
Business Summary
Chemtura Corporation, together with its consolidated subsidiaries, is a specialty chemical company. The Company isengaged in manufacture and sale of specialty chemicals. It operates in a range of end-use markets, includingautomotive, transportation, construction, packaging, agriculture, lubricants, plastics for durable and non-durablegoods, electronics, and home pool and spa chemicals. The Company is a diversified producer of specialty chemicalsand polymer products and is a supplier of home pool and spa chemicals in United States. On February 29, 2008,Chemtura completed the sale of the oleochemicals business. On January 31, 2008, Chemtura completed the sale ofthe fluorine chemical business. In March 2009, Chemtura Corporation announced that the Company and 26 of itsUnited States affiliates have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Codein the United States Bankruptcy Court for the Southern District of New York (the Court).
Contact Info
Chemtura Corporation is headquartered at:199 Benson Road, Middlebury, CT, 06749United States(203) 573-2000www.chemtura.comStephen Forsyth, Investor Relations
Financial Trends
TTM = Trailing Twelve Months, * = Most Recent Quarter.
Historic Growth RatesFiscal Year Ending 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 TTM 3 Year 5 Year 10 Year
Sales (mil) $2,285.2 $2,739.0 $3,458.0 $3,747.0 $3,546.0 $2,818.0 8.99 12.80 7.04EPS (GAAP) ($0.37) ($1.21) ($1.14) ($0.19) ($4.02) ($3.67) NA NA NADividends/Share $0.20 $0.20 $0.20 $0.20 $0.15 $0.05 (9.14) (5.59) 11.61Book Value/Share $2.84 $7.40 $6.97 $7.65 $1.96 * $1.26 (35.80) (5.83) 7.76Tangible Book Value/Sh. ($1.79) ($0.24) ($0.20) ($0.17) ($1.27) * ($1.72) NA NA NACash Flow/Share $0.73 ($0.30) ($0.25) $0.95 ($3.04) ($2.85) NA NA NAFree Cash Flow/Share ($0.45) ($1.23) $0.31 ($0.07) ($0.69) ($0.75) NA NA NA
Key Ratios
Historic AveragesFiscal Year Ending 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 TTM 3 Year 5 Year 10 Year
% Sales Growth 17.7 19.9 26.3 8.4 (5.4) (24.9) 9.7 13.4 8.8% EPS Growth (65.0) 229.5 (5.8) (83.6) 2,056.0 (200.6) 655.5 426.2 169.1% Gross Margin 23.0 26.3 24.8 23.6 20.8 19.7 23.0 23.7 26.7% Operating Margin (0.1) (1.7) (1.1) 1.6 (26.2) (29.5) (8.6) (5.5) (2.2)% Tax Rate 54.3 (29.5) (85.7) (9.8) 2.7 NA (30.9) (13.6) 2.4% Return on Assets (1.6) (5.6) (5.8) (1.0) (26.0) (24.5) (11.0) (8.0) (5.4)% Return on Investment (2.2) (7.2) (7.3) (1.2) (39.0) (30.2) (15.8) (11.4) (7.5)% Return on Equity (13.3) (20.4) (15.8) (2.5) (83.6) (92.1) (34.0) (27.1) (24.3) Asset Turnover 0.9 0.7 0.7 0.9 0.9 0.8 0.8 0.8 0.8Receivables Turnover 10.1 6.9 7.8 10.3 9.1 6.0 9.0 8.8 9.0Inventory Turnover 4.5 3.9 3.9 4.3 4.4 3.6 4.2 4.2 3.9
Equity Information
Whether you are willing to accept companies that have or don't have major shareholders with controlling ownership blocks,multiple classes of common, or convertible debt or preferred issues is a matter of individual preference. Look here foranything along these lines that might make you more or less inclined to invest in this company.
Common Stock $.01 Par, 6/09, 500M auth., 254,500,000 issd. less 11,500,000 shs. in Treas. @ $167M. Insiders own less than 1%(incl. 561K in options). PO 12/92, 5M shares (2M by Co.) @ $20.50 by Salomon Bros. 03/09, Company delisted from NYSE to OTC pink sheets.
Analyst Footnotes
Look for accounting changes, restructurings,etc.which may affect how useful historic data isinassessing future company prospects.
5/00, Name changed from CK Witco Corporation. 5/92,7/90, 6/89, 2-for-1 stock splits. FY'94 - FY'95 Q'srestated for 8/96 pooling with Uniroyal Chemical for23.7M Common.
Peer Comparison
This table gives an indication of how Chemtura Corporation stands in key respects compared with companies in the Chemical Manufacturing Industry
Company Name (Ticker)Last Fiscal YearRevenue (mil)Current FiscalYear ProjectedRevenue (mil)ProjectedPrice/Sales Operating EPSCurrent FiscalYear ProjectedEPSP/E Based onCurrent YearEstimatesEPS % GrowthPrevious 5 YearsEPS % GrowthNext 5 YearsChemtura Corpor... (CEMJQ) $3,546.0 $2,744.9 0.1 ($4.02) $0.00 NA NA NA
BASF SE (BAS) NA NA NA NA NA NA NA NABayer AG (BAY) NA NA NA NA NA NA NA NAEastman Chemical Compan... (EMN) $6,726.0 $4,998.3 0.7 $4.32 $2.91 17.2 NA 6.5Ciba Holding Inc. (CIBN) NA NA NA NA NA NA NA NA Albemarle Corporation (ALB) $2,467.1 $2,043.4 1.4 $2.10 $1.76 18.1 19.0 9.0FMC Corporation (FMC) $3,115.3 $2,949.2 1.2 $4.35 $4.11 11.6 50.7 8.0Cytec Industries Inc. (CYT) $3,639.9 $2,705.4 0.5 ($4.16) $0.67 40.7 NA 4.5
Chemtura Corporation (OTC:CEMJQ) -- Chemical Manufacturing/Basic MaterialsReuters Company Research
Getting Acquainted
Start your analysis by learning what the company does, how well it does it, where it stands relative to peers, and whether aspects of the corporate structure or capitalization arebothersome to you.
September 2, 2009 Page 3
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