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Why Did Ashland Gain 11% in November?

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Dec. 5 2018, Updated 8:11 a.m. ET

Ashland gained 11% in November

In November, Ashland (ASH) was the biggest gainer among specialty chemical stocks. Ashland gained 11% in November and outperformed the S&P 500. The S&P 500 (SPY) gained 1.8% in November.

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What drove the stock up?

Ashland reported an adjusted EPS of $0.97 in the fourth quarter—an increase of 24.4% on a year-over-year basis. On a reporting basis, Ashland reported an EPS of $0.15—compared to a loss of $0.92 per share. Ashland’s revenues grew 9% during the fourth quarter to $956 million.

Ashland has entered into a definitive agreement to sell its composites business and butanediol facility in Marl, Germany, to INEOS Enterprises. The deal is valued at $1.1 billion. Ashland said that the amount will be used to pay off the debt. Currently, Ashland has a debt of $2.2 billion. After Ashland pays off its debt, the debt is expected to decrease 50%.

Stock update

The gain in the Ashland’s stock price resulted in the trend reversal in the stock’s 100-day moving average price. The stock traded marginally above the 100-day moving average price of $81.75. Ashland’s 100-day moving average price is stabilizing in the range of $81–$82. On a year-to-date basis, Ashland has gained 13.9%. Celanese (CE), Eastman Chemical (EMN), and Westlake Chemical (WLK) have declined 10.0%, 16.2%, and 33.9%, respectively.

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