Huntsman names its spin-off
On January 17, 2017, Huntsman (HUN) announced the name of its proposed spin-off for its pigments and additives business. It will be called Venator Materials Corporation. Huntsman also decided that its Textile Effects business will not be part of the spin-off but will continue to be part of Huntsman.
With the recovery in titanium dioxide prices, Venator Materials is expected to generate $75.0 million in annual EBITDA (earnings before interest, tax, depreciation, and amortization).
The spin-off is expected to be completed by the end of 2018. Venator stock is projected to trade on the New York Stock Exchange under the ticker VNTR after Venator shares are distributed to Huntsman shareholders.
On January 20, 2017, HUN closed at $19.77, a fall of 1.9% for the week. The First Trust Materials AlphaDEX ETF (FXZ), which holds 2.0% in HUN as of January 20, 2017, rose 0.10% for the week and closed at $37.03.
HUN stock closed 10.9% higher than its 100-day moving average of $17.83, indicating an upward trend. Analysts expect HUN’s 12-month target price to be $21.50, implying a potential return of 8.8% from its closing price on January 20, 2017.
You can hold HUN indirectly by investing in the First Trust Materials AlphaDEX ETF (FXZ). The fund’s top holdings include Mosaic (MOS), Owens-Corning (OC), and Berry Plastics Group (BERY), with weights of 3.4%, 3.4%, and 3.3%, respectively, as of January 20, 2017.