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.
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.”
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.