If a massive industrial maker of coatings, paints, solvents, lubricants, packaging, and specialty polymers doesn't get you excited, its story will. Even since its spinoff from DowDuPont in late March 2019, Dow (NYSE: DOW) shares have been all over the place -- as high as 24% above the spinoff price and as low as 17% below it. That's some serious movement for an industrial company of its size.
Since Dow reported second-quarter earnings on July 25, the company has found itself trending lower. That said, Dow is a free cash flow machine. The company acts as a supplier of high-volume commodity chemical products like valuable silicone and polyethylene. Almost all Dow's chemical products are tied to basic feedstocks, most notably crude oil.
The cyclical nature of Dow and its tethering to feedstocks and global trade makes the company vulnerable to the volatile commodity prices and trade tensions that have plagued the market of late. With earnings approaching on October 24, investors should reflect on Dow's prior quarter to gauge whether the company is on track for long-term shareholder value.
Source Fool.com