Ashland Begins New Composites Research Center in Shanghai

Ashland’s new R&D center

On September 4, 2018, Ashland (ASH) inaugurated its new composites research and development technical center in Jinling Valley, Shanghai. The R&D center is expected to strengthen ASH’s position in the region and is expected to act as Asia-Pacific’s technical center of ASH’s composite segment. The center is approximately 1,500 square meters and will have 20 scientists and engineers.

Ashland Begins New Composites Research Center in Shanghai

In fiscal Q3 2018, Ashland’s Composite segment reported revenue of $250 million, implying growth of 20% on a year-over-year basis. The segment’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 4% to $28 million.

Andrew Johnston, Ashland’s Composites segment’s vice president, said, “Global demand is increasing for innovative materials that can meet and exceed the challenges from a variety of environments and applications. As our customer base grows, the need to create, produce and test new chemistries, formulas and materials plays a critical role in the market cycle.”

Stock performance

Ashland had another quiet week. The stock fell marginally by 0.4% and closed at $84.42. Despite the decline in the stock, ASH traded 5.9% above its 100-day moving average price of $79.18. ASH’s 100-day moving average price is on an upward trend, indicating bullishness in the stock. On a YTD (year-to-date) basis, Ashland stock has gained 17.3%. Ashland’s 14-day relative strength index was at 46, suggesting that the stock isn’t overbought or oversold.

Ashland underperformed the Invesco Russell MidCap Pure Value ETF (PXMV), which also fell 0.4% for the week. PXMV invests 1.4% of its portfolio in Ashland. PXMV also provides exposure to Dish Network (DISH), Newmont Mining (NEM), and CNA Financial (CNA) with weights of 1.3%, 0.9%, and 1.1%, respectively, as of September 7, 2018.