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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Celanese (CE) ten years ago? It may not have been easy to hold on to CE for all that time, but if you did, how much would your investment be worth today?
Celanese's Business In-Depth
With that in mind, let's take a look at Celanese's main business drivers.
Texas-based Celanese Corporation is a global hybrid chemical company. The company produces chemical substances and materials. About 95% of Celanese's products rank either first or second in their respective markets, based on market shares.
Celanese makes high performance engineered polymers that are used in a range of high-value applications. It also produces acetyl products for most major industries.
The company's vast product portfolio caters a number of end-use applications including automotive, construction, consumer and industrial adhesives, performance industrial, textiles, chemical additives, consumer and medical, energy storage, filtration, paints and coatings, paper and packaging and food and beverage. The company generated revenues of $8.5 billion in 2021.
The company's operating segments are as follows:
Engineered Materials/EM (32% of 2021 sales): The segment develops, produces and supplies high performance technical polymers for application in automotive and electronics products and in other consumer and industrial applications. The primary products of Advanced Engineered Materials are Polyacetal products and ultra-high molecular weight polyethylene (GUR).
Acetate Tow (5%): The segment consists of Acetate Products businesses. The Acetate Products business primarily produces and supplies acetate tow and acetate flake, which are used in the production of filter products.
Acetyl Chain (63%): This segment includes the results of Celanese's Industrial Specialties and Acetyl Intermediates. The Industrial Specialties business includes the Emulsions and AT Plastics businesses. The Emulsions business produces vinyl acetate/ethylene emulsions. AT Plastics offers a complete line of low-density polyethylene and specialty ethylene vinyl acetate resins and compounds.
The Acetyl Intermediates business produces and supplies acetyl products including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. Acetic acid is a key intermediate chemical used in the production of VAM, purified terephthalic acid and acetic anhydride.
Other chemicals produced in this segment are organic solvents and intermediates for pharmaceutical, agricultural and chemical products.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Celanese ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2012 would be worth $4,111.65, or a 311.16% gain, as of June 8, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 216.40% and the price of gold increased 11.77% over the same time frame in comparison.
Analysts are forecasting more upside for CE too.
Earnings estimates for Celanese for the second quarter have been increasing over the past month. Cost savings through productivity actions and operational improvement are likely to support its bottom line. Acquisitions including SO.F.TER., Nilit and Omni Plastics are also expected to drive its results this year. Celanese will also gain from expansion in emerging regions. Its efforts to lower debt also bode well. It also remains committed to returning value to its shareholders leveraging strong cash flows. It has also outperformed the industry over a year. However, it faces headwinds from elevated raw material costs. Weaker automotive production may also affect its order patterns. Moderating prices in China may also hurt Acetyl Chain margins. The Acetate Tow unit also remains under pressure due to higher energy and acetyls costs.
Shares have gained 14.51% over the past four weeks and there have been 7 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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