Ashland increases product prices
On August 28, Ashland (ASH) announced price increases of its composite portfolio and gelcoats. The price increase will be up to $0.05 per pound. The price increase will be effective from September 12, 2018, or as the agreement allows. The price increase will impact the North American region only.
Ashland cited the increase in raw material prices, freight charges, packaging charges, and disruption in the supply chain due to tariffs as the primary reasons for the price hikes. The impact of the price increase might be reflected in the company’s fiscal fourth-quarter earnings. As a result of this price hike, the revenues could see a positive impact assuming the volumes don’t fall. Two weeks ago, ASH increased the prices of its composite portfolio across the EMEA (Europe, Middle East, and Africa) region. In its fiscal Q3 2018, ASH’s composite segment reported revenue of $250 million, representing an increase of 20% on a year-over-year basis.
Stock price update
Ashland had a quiet week. The stock declined by 0.85% and closed at $84.20. Despite the decline in the stock, ASH continued trading 6.9% above its 100-day moving average price of $78.76. 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 risen by 15.1%. Ashland’s 14-day relative strength index was at 51, suggesting that the stock isn’t overbought or oversold.
Ashland underperformed the Invesco Russell MidCap Pure Value ETF (PXMV), which declined 0.3% 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 August 31.