Market News

Taking Stock of Ashland’s Newly Added Risk Factor

Shares of Ashland Global Holdings, Inc. (ASH) have gained 23.6% over the past six months. The company provides additives and specialty ingredients to a diverse set of markets, including automotive, construction, energy, food & beverage, personal care, pharmaceutical, and nutraceuticals.

Recently, Ashland’s fourth-quarter revenue increased 12% year-over-year to $591 million on the back of robust demand, increased pricing, and the acquisition of Schulke & Mayr. Significantly, net income increased to $43 million from $5 million a year ago.

With these developments in mind, let’s look at what’s changed in Ashland’s key risk factors that investors should know.

Risk Factors

According to the TipRanks’ Risk Factors tool, Ashland’s top two risk categories are Ability to Sell and Macro & Political, which contribute 20% each to the total 20 risks identified for the stock. In its recent annual report, the company has added one key risk factor under the Ability to Sell risk category.

Ashland has agreed to sell its Performance Adhesives business to Arkema and anticipates the transaction to conclude in the quarter ending March 31, 2022. If this sale is not completed or gets delayed then Ashland could see an adverse impact. Further, the risk remains that Ashland may not realize the anticipated benefits from this transaction.

The Ability to Sell risk factor’s sector average is at 12%, compared to Ashland’s 20%.

Hedge Fund Activity

TipRanks data points that Wall Street’s top hedge funds have decreased holdings in Ashland by 8.3 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock based on activities of eight hedge funds in the recent quarter.

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