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W.R. Grace Stock Is on Its Back Foot: Can It Reverse the Trend?

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W.R. Grace’s 2018 stock performance

So far in 2018, W.R. Grace (GRA) stock has underperformed the market. On a year-to-date basis, GRA has fallen 5.3%. 

In comparison, LyondellBasell (LYB) and Olin (OLN) have fallen 1.4% and 11.4%, respectively, while Eastman Chemical (EMN) has risen 16.0% in the same period.

The fall in GRA’s stock price was primarily the result of the volatility in the global stock market. Being a high beta stock, GRA fell more than the broader market. 

However, positive developments in its business, such as its investment in Kazakhstan, its winning a new contract from Grupa Azoty for its UNIPOL license, and its positive adjusted earnings per share guidance for 2018, could drive the stock back into the green in the upcoming quarters.

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Moving averages

GRA’s mediocre performance has resulted in its stock trading 6.9% below its 100-day moving average price of $71.07, indicating prevailing weakness. GRA’s 14-day relative strength index score of 42 indicates that the stock is neither overbought nor oversold. Also, the short interest data suggest that bearishness in the stock has reduced and that its price could move up due to further short covering.

Investors can indirectly hold GRA through the Mid Cap US Equity Select ETF (RNMC), which has 0.2% exposure to W.R. Grace as of March 14, 2018.

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