LyondellBasell - LYB - Plus Ideas

When I did my AI review of Dow Chemical, it made me go back to review LyondellBasell - LYB - $58.

I can almost justify buying LYB. I know you yield whores would love the 9% yield. There is plenty to like at LYB:

1. the CEO is calling this the worst down-cycle of his long career, I love troughs

2. the balance sheet is ok, not great, but ok, 4x interest coverage potentially at the bottom of the cycle

3. they are still buying stock back and raising the dividend, which is very uncommon for a stock with a 9% yield

4. LYB has decent US assets, and is in the process of selling some bad European assets

But the negatives are just too large:

1. too much exposure to China and Europe, where feedstock issues are a problem

2. too much exposure new housing and auto production

3. it its taking a long time to close/sell European assets

4. there could still be a bad 2nd quarter

5. management is at best ok, but far from exciting

6. Dow has better assets, but a worse balance sheet

If you cannot afford to buy lunch without a 5% plus dividend yield on your equity portfolio, you might buy LYB, otherwise their are better total return stocks available. LYB deserves to be a top 10 idea, but not in the top 25 Model portfolio.

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Below is roughly my top 50 idea list.

I am getting bored with my roughly 300 stock under 2x book universe. I am finding a few new ideas on more than 50% of their 5-year high list. The new low list has too many bad balance sheet companies.

1. Merck

2. Perrigo/Astrana/Baxter/Avantor/Henry Schein

3. Star Bulk Carriers/Noble/Ardmore

4. Reynolds Consumer ??? - the chart of slow death, are there more?

5. Entegris/Amkor/MKS/Qualcomm

6. Constellation/General Mills/Clorox

7. Norwegian/Pursuit/Vail/Choice Hotels

8. LyondellBasell/Westlake

9. International Flavors

10. Scott’s Miracle-Gro

11. First Watch/Portillo’s

12. Quaker Chemical

13. Oxford/Columbia/American Eagle/Steve Madden/Etsy/Signet

14. Pulte/Mohawk/ Louisiana Pacific

15. Lamb Weston

16. Core & Main/ xxx??? - I want a few more high quality ideas

17. Atlas Energy/Ultra Clean/Wabash/Stepan/Rogers/SunOpta/CMCO/xxx??? - I need more small caps

18. Coty/Estee Lauder

19. Cubesmart/Prologis

20. CarMax/Celanese/SAIA/LKQ/Best Buy

21. Starwood

22. Lazard/Moelis/Midwest One

23. Madison Square Garden Sports