Corporate Webpages NewMarket Corporation
In 1924 GM joined with Standard Oil (now Exxon) to form a
partership called the "Ethyl Corporation." Dupont was also a
1/3 owner of GM at the time. Gulf Oil also quickly became
involved. Andrew Mellon, Sec'y of the Treasury at the time, was
also in charge of the Public Health Service. He had personal
conflicts of interest in Gulf Oil and was also investigating the
effects of leaded gasoline on public health.
In that year, five workers at a Standard Oil refinery became
violently ill due to the use of lead as a fuel additive.
There were worries about competition from other forms of fuel
additives that could reduce engine knock and boost octane.
These have persisted even to this day as lead additives are
still used in fuels for certain piston aircraft and racing cars.
In Europe, tetraethyl lead was not used, and an alcohol-based
additive was used instead. Alcohol, however, permitted
absorption of water from the air and contributed to rust and
corrosion in engines, which deteriorated much faster. GM,
Charles Kettering, and others could not find a suitable
substitute for lead, although Sunoco, Atlantic Refining,
Richfield, and other oil companies were using catalytic
cracking, benzene, and higher parrafin-derived alchohols at the
time as well as European imports as a substitute. Any
"scandals" such as corporate efforts to conceal harmful effects
of lead poisoning seem to apply more to GM and its relationship
to the former Ethyl Corp. rather than Ethyl Corp. as we now know
it and Ethyl Corp. has released all its internal historical memos.
Besides public health issues, lead-based additives were very
destructive to catalytic converters in newer cars.
Thus, it was common for drivers to go into a gasoline station
and say, "Fill her up with ethyl," meaning fill up the tank with
premium gasoline with anti-knock additives, where Ethyl Corp.
had the primary lock on most premimum gasolines. (It was sort
of like wrapping your packages with "Scotch" tape.)
The question before us is, "How did banning lead from gasoline
used automobiles in the 1990's affect Ethyl Corporation?" We
believe the answer is, "Not very much." Ethyl had plenty of
time to get ready for the transition, and new fuel additives
were developed including "methylcyclopentadienyl managanese
tricarbonyl" (MMT) or other patented additives. However, a
battle currently exists in Canada over the permitted use of
Ethyl products as fuel additives, which could affect its market there.
The U.S. market seems fairly secure. In the 1970's Ethyl stock
shares dropped precipitously, but earnings did not.
Ethyl Corp. under CEO Gottwald diversified into other specialty
chemicals such as semiconductor chemicals, herbicides, resuable
bottle caps, plastics, aluminum, energy, and even insurance.
In 1962, Albemarle Paper Mfg. Co. of Richmond, VA, purchased Ethyl
Corporation, a company 13 times its size, and changed its name
to Ethyl Corporation. General Motors sought to divest its
interests in Ethyl due to growing concerns about liabilities for
tetraethyl lead. In 2004, Ethyl Corporation changed its name to
NewMarket Corporation after merging with Afton Chemical
Corporation, a competing manufacturer of lubricant and fuel additives.
Today, Ethyl is the smallest of four major manufacturers of fuel
additives, Lubrizol in Texas being the largest, and consortiums
of Exxon Mobil and Shell Oil, and Oronite, a unit Chevron.
Recently, Lubrizol's additive business fell 14% from a year
earlier, but NewMarket seems less affected because of its diversification.
Still the company's projected earnings this year will be less
than for last year. The company has strong financials, is liked
by our two favorite researchers, less so by analysts, and is a
value play more than one of growth.
Anyone who has driven through Richmond is probably impressed by
NewMarket's (Albemarle Paper's) classic colonial architecture
offices which could easily be mistaken for government buildings.
NewMarket stock has a surprisingly strong Decision Matrix rating
in our article, with the primary factor holding it back
analysts' assumption of lower earnings this year (although not
much lower.) Corporate governance in this company appears to us
to be good.
01-07-2010: NewMarket Corporation (NEU): Got the Lead Out
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
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Zenith Index |
NewMarket Corp. (NEU ) Sector: Basic Materials
330 South Fourth Street Industry: Specialty Chemicals
Richmond, VA 23218-2189 Exchange: NYSE
NewMarket Corporation, through its subsidiaries, engages in the
petroleum additives and real estate development businesses. It
offers lubricant additives that are used in various vehicle and
industrial applications, including engine oils, automatic
transmission fluids, gear oils, hydraulic oils, turbine oils, and in
various other applications where metal-to-metal moving parts are
utilized. The company offers petroleum additives to oil companies
and refineries, original equipment manufacturers, and other
specialty chemical companies. The company also provides fuel
additives that are used to improve both the oil refining process and
the performance of gasoline, diesel, residual, biofuels, and other
fuels, as well as protects against deposits in fuel injectors,
intake valves, and the combustion chamber. It offers its fuel
additives to industry, government, original equipment manufacturers,
and individual customers. In addition, the company owns
approximately 64 acres of real estate property in downtown Richmond,
Virginia. It has operations in the United States, Europe, Asia,
Latin America, Australia, India, the Middle East, and Canada. The
company was founded in 1887 and is headquartered in Richmond,
Virginia.
Last Trade: 123.07 52-Week Range: 124.38 - 27.82
Trade Date: 01-05 Avg. Volume: 151,565 Shares
Index Membership: S&P 600 SmallCap Employees: 1,280
Corporate Governance:
NewMarket Corp.'s Corporate Governance Quotient (CGQ-«) as of
3-Jan-10 is better than 51.1% of S&P 600 companies and 60.2% of
Materials companies.
EPS: 8.88 Dividend Amount: $ 1.50 Yield: 1.30%
Ex-Dividend Date: 11-Dec-09 Mkt Cap: $ 1,880,000K
Payout Ratio: 10.00%
Last Split Factor (new for old): 3:2 Split Date: 01-Jul-93
Key Statistics:
Enterprise Value: $ 1,950,000K Revenue (ttm) : $ 1,490,000K
Gross Profit: $ 314,490K
Earnings before Income Tax, Depreciation and Amortization: $ 259,980K
Enterprise Value/Revenue (ttm): 1.31 Revenue per Share: $ 98.31
Enterprise Value/EBITDA (ttm): 7.50 Qtrly Rev Growth (y to y): -5.20%
P/E Ratio (fwd projected): 11.97 P/E Ratio (current): 13.94
P/E Growth Ratio (5 yr expected): 0.69 Operating Margin: 15.34%
Price/Sales Ratio: 1.22 Profit Margin: 9.06%
Price/Book Value: 4.43 Book Value: $ 27.12/sh.
Return on Assets: 15.33% Net Income Avl to Common: $ 135,390K
Return on Equity: 36.41% Diluted Earnings/Share: $ 8.88
Qrtly Earnings Growth (yoy): 244.10%
Balance Sheet Items : Cash Flow Items (ttm):
(most recent qrtr) (trailing 12 mo.)
Total Cash: $ 134,070K Operating Cash Flow:$ 203,700K
Total Debt: $ 256,520K Lvgd Free Cash Flow:$ 117,360K
Total Debt/Equity: 0.00
Total Cash/Share: $ 8.82
Current Ratio: 2.07
Share Statistics: Stock Price History:
Shares Outstanding: 15,210K Stk 52-Week Change: 226.93%
Float: 10,740K S&P 500 52-Wk Chng: 22.16%
Sh. Short % of Float: 3.40% 50-Day Moving Avg: 112.10
Short Ratio: 2.90 200-Day Moving Avg: 91.53
% Held by Institutions: 52.60% Beta: 1.69
% Held by Insiders: 24.00%
Analysts' Estimates: Cur. Qtr Next Qtr Cur. Year Next Year
___________________________ Dec-09 Mar-10 Dec-09 Dec-10
Average Earnings Estimate 2.71 2.51 11.07 10.35
Average Revenue Estimate 392M 390M 1,520M 1,650M
Factors Comparing This Company to Its Industry Leader (1.0 = Average):
Long Term EPS Growth Rate (5 yr): 0.000 EPS Growth (Qrtly YoY): 0.000
PEG Ratio (ttm, 5 yr expected): 0.081 P/E Ratio (ttm): 0.203
Revenue Growth (Qrtly YoY): -.090
Annual Income Statements: All numbers in thousands)
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Total Revenue 1,617,431 1,374,874 1,263,297
Cost of Revenue 1,302,937 1,078,302 999,211
Gross Profit 314,494 296,572 264,086
Operating Expenses:
Research & Development 81,752 76,834 70,263
Selling, General & Administrative 116,382 111,115 101,010
Non-Recurring Expenses 0 0 -14,825
Other Operating Expenses 0 0 0
Total Operating Expenses 0 0 0
Operating Income or Loss 116,360 108,623 107,638
Income from Continuing Operations:
Total Other Income/Expenses Net 1,012 3,358 -4,092
Earnings Before Interest & Taxes 117,372 111,981 103,546
Interest Expense 12,046 11,557 15,403
Income Before Taxes 105,326 100,424 88,143
Income Tax Expense 32,099 21,874 30,621
Minority Interest 0 0 0
Net Income from Continuing Op.s 73,227 78,550 57,522
Non-recurring Events:
Discontinued Operations 0 16,771 0
Extraordinary Items 0 0 0
Effect of Accounting Changes 0 0 0
Other Items 0 0 0
Net Income 73,227 95,321 57,522
Preferred Stock & Other Adjustmnts 0 0 0
Net Income Avail To Common Shares 73,227 95,321 57,522
Quarterly Income Statements: All numbers in thousands)
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Total Revenue 417,832 370,921 337,128 368,595
Cost of Revenue 274,865 259,508 246,054 291,475
Gross Profit 142,967 111,413 91,074 77,120
Operating Expenses:
Research & Development 21,602 21,092 18,754 20,173
Selling, General & Adminis. 27,618 29,256 26,267 28,634
Non-Recurring Expenses 0 0 0 0
Other Operating Expenses 0 0 0 0
Total Operating Expenses 0 0 0 0
Operating Income or Loss 93,747 61,065 46,053 28,313
Income from Continuing Operations:
Total Other Income/Expenses Net -3,804 -11,850 -80 111
Earnings Before Int. & Taxes 89,943 49,215 45,973 28,424
Interest Expense 2,909 2,859 2,936 3,192
Income Before Taxes 87,034 46,356 43,037 25,232
Income Tax Expense 30,347 15,698 14,349 5,873
Minority Interest 0 0 0 0
Net Income from Continuing Op.s 56,687 30,658 28,688 19,359
Non-recurring Events:
Discontinued Operations 0 0 0 0
Extraordinary Items 0 0 0 0
Effect of Accounting Changes 0 0 0 0
Other Items 0 0 0 0
Net Income 56,687 30,658 28,688 19,359
Preferred Stock & Other Adj.s 0 0 0 0
Net Income Avail To Common Shs 56,687 30,658 28,688 19,359
Annual Balance Sheets: All Numbers in Thousands
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Current Assets:
Cash & Cash Equivalents 21,236 72,062 60,540
Short Term Investments 525 0 0
Net Receivables 217,641 225,917 210,520
Inventory 201,072 193,694 185,581
Other Current Assets 5,704 3,368 5,319
Total Current Assets 446,178 495,041 461,960
Long-Term Investments 0 0 11,983
Property, Plant & Equipt 241,736 183,562 162,114
Goodwill 861 0 0
Intangible Assets 57,066 45,555 51,708
Accumulated Amortization 0 0 0
Other Assets 23,139 25,380 20,599
Deferred Long Term Asset Charges 42,472 21,396 36,429
Total Assets 811,452 770,934 744,793
Current Liabilities:
Accounts Payable 108,600 170,676 156,943
Short/Current Long Term Debt 784 736 691
Other Current Liabilities 26,529 6,249 2,549
Total Current Liabilities 135,913 177,661 160,183
Long Term Debt 236,378 157,061 152,748
Other Liabilities 148,038 119,205 130,460
Deferred LT Liability Charges 0 0 0
Minority Interest 0 0 0
Negative Goodwill 0 0 0
Total Liabilities 520,329 453,927 443,391
Stockholder Equity:
Misc. Stocks Options Warrants 0 0 0
Redeemable Perferred Stock 0 0 0
Preferred Stock 0 0 0
Common Stock 115 5,235 88,263
Retained Earnings 386,758 346,132 260,304
Treasury Stock 0 0 0
Capital Surplus 0 0 0
Other Stockholder Equity -95,750 -34,360 -47,165
Total Stockholder Equity 291,123 317,007 301,402
Net Tangible Assets 233,196 271,452 249,694
Quarterly Balance Sheets: All Numbers in Thousands
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Current Assets:
Cash & Cash Equivalents 133,770 112,048 59,510 21,236
Short Term Investments 300 0 0 525
Net Receivables 257,280 225,644 207,391 217,641
Inventory 182,457 168,446 159,757 201,072
Other Current Assets 9,141 8,252 8,797 5,704
Total Current Assets 582,948 514,390 435,455 446,178
Long-Term Investments 0 0 0 0
Property, Plant & Equipt 293,449 272,090 253,325 241,736
Goodwill 0 861 861 861
Intangible Assets 47,271 48,618 50,827 57,066
Accumulated Amortization 0 0 0 0
Other Assets 41,319 37,368 35,969 23,139
Deferred LT Asset Charges 2,896 2,410 2,526 26,529
Total Assets 1,005,141 915,958 816,141 811,452
Current Liabilities:
Accounts Payable 193,099 175,873 151,389 108,600
Current Portion LT Debt 86,055 809 796 784
Other Current Liabilities 0 0 0 0
Total Current Liabilities 282,050 179,092 154,711 135,913
Long Term Debt 150,358 218,200 200,820 236,378
Other Liabilities 160,283 159,002 146,942 148,038
Deferred LT Liab. Charges 0 0 0 0
Minority Interest 0 0 0 0
Negative Goodwill 0 0 0 0
Total Liabilities 592,691 556,294 502,473 520,329
Stockholder Equity:
Misc. Options, WarrantS 0 0 0 0
Redeemable Perferred Stock 0 0 0 0
Preferred Stock 0 0 0 0
Common Stock 266 137 137 115
Retained Earnings 492,147 439,262 412,405 386,758
Treasury Stock 0 0 0 0
Capital Surplus 0 0 0 0
Other Stockholder Equity -79,963 -79,735 -98,874 -95,750
Total Stockholder Equity 412,450 359,664 313,668 291,123
Net Tangible Assets 365,179 310,185 261,980 233,196
Annual Cash Flow: All Numbers in Thousands
Period Ending 31-Dec-08 31-Dec-07 31-Dec-06
Net Income 73,227 30,658 57,522
Operating Activites:
Depreciation 28,968 29,126 31,592
Adjustments to Net Income 16,514 -19,267 -10,492
Changes in Accounts Recv'bls -14,399 -4,688 -3,584
Changes in Liabilities -38,257 11,522 -11,321
Changes in Inventories -36,437 -2,758 -24,348
Changes in Other Op'ing Actv's -8,968 321 -2,293
Total Cash Flow fr Operations 20,648 109,577 37,076
Investing Activities:
Capital Expenditures -74,619 -31,072 -26,161
Investments 0 0 0
Other Cash Flows fr Investing -24,253 14,241 4,314
Total Cash Flows fr Investing -98,872 -16,831 -21,847
Financing Acitivies:
Dividends Paid -15,131 -6,641 -8,627
Sale or Purchase of Stock -26,495 -83,128 856
Net Borrowings 79,125 2,516 -3,998
Other Cash Flows fr Financing -5,305 3,700 -172
Total Cash Flows fr Financing 32,194 0 -16,831
Effect of Exchange Rate Change %-40,812,380,160 -4,081 2,379
Change in Cash & Cash Equiv.s 50,111 -50,111 11,572
Quarterly Cash Flow: All Numbers in Thousands
Period Ending 30-Sep-09 30-Jun-09 31-Mar-09 31-Dec-08
Net Income 56,687 30,658 28,688 19,359
Operating Activites:
Depreciation 8,224 8,105 8,043 7,770
Adjustments to Net Income -69,913 23,093 59,918 8,441
Changes in Accounts Recv'bls 0 0 0 -14,399
Changes in Liabilities 0 0 0 -38,257
Changes in Inventories 0 0 0 -36,437
Changes in Other Oper'g Acts 44,890 -3,796 20 62,608
Total Cash Flow f Operations 39,888 58,060 96,669 9,085
Investing Activities:
Capital Expenditures -27,949 -23,655 -15,305 -52,788
Investments -9,770 0 0 0
Other Cash Flows fr Investing 5,350 0 -1,350 0
Total Cash Flows fr Investing -32,369 -25,005 -19,305 -34,324
Financing Acitivies:
Dividends Paid -3,802 -3,801 -3,041 -3,041
Sale or Purchase of Stock 9 0 22 69
Net Borrowings 16,654 17,534 -36,099 22,790
Other Cash Flows fr Financing 986 -616 1,527 -3,818
Total Cash Flows fr Financing 13,847 13,117 -37,591 16,000
Effect of Exchange Rate Chg 356 6,366 -2,024 -2,491
Change in Cash & Cash Equiv. 21,722 52,538 37,749 -11,730
NEU NewMarket Corp. [Indices near +3.0 or near zero,
or < zero bear special attention.]
P/E Ratio Tests:
Current P/E Ratio < 28? 2.0086 P/E Ratio > 5? 1.0000
P/E Ratio Vs Growth Rate: 0.0700 Forward P/E Ratio < 28? 2.3392
Sales Tests:
Price/Sales Ratio < 2.3? 1.8852 Inventory/Sales < 5%? 0.4022
Sales < $1 billion? 0.6183 Operating Margin < 7.5%? 0.4889
Balance Sheet Tests:
Debt/Equity < 0.40? 1.0000 Long-Term Debt Service: 1.2316
LTD Being Reduced? 1.2000 Short-Term Debt Service: 3.0000
Current Ratio > 2? 1.0335 Working Capital >= 1.5? 0.9677
Leverage Ratio < 20%? 1.1527 Debt / Assets < 1? 3.0000
Quick Ratio > 1? 1.3865 Inventory Turnover > 1? 3.0000
Shares Out Decreasing? 1.8000 Market Cap.> 1.5 Billion? 0.7979
Profit Margin > 7.5%? 1.2080
Income Tests:
Dividend Yield > 2.0%? 3.0000 EPS Annual Growth > 10%? 0.0000
Enterprise Value/Revenue: 0.8733 EPS 5-yr Growth > 20%? 0.0000
Enterprise Value/EBITDA: 1.0716 EPS Growth Consistent? 2.4000
EPS Qrtly Growth > 10%? 3.0000 Collection < 45 days? 0.9162
Rev. Qtrly Growth > 15%? -0.7800 Gross Pft/Cur. LTD < 1? 3.0000
EPS Annual Growth > 10%? 0.0000 Borrowing Int. Rate< 6%? 1.5516
Stock Performance Tests:
Volatility > 25%? 3.0000 % Held by Insiders < 5%? 0.2083
Beta > 1.25? 1.3520 % Held by Institut. < 50? 0.9506
50 Da MA > 200 Da MA? 0.5014 % Held by Institut. > 30? 1.7533
52-Wk Change vs. S&P 500: 1.4774 Short Ratio > 5? 0.5800
Price/Book Value < 3? -0.4300 Short % of Float > 20? 0.1700
Return on Assets > 17%? 0.9018 Average Volume > 100,000? 1.5157
Cash Flow Tests:
Oper. C.F. > Lever'd C.F: 1.7357 Positive Free Cash Flow? 1.0000
Positive Oper. Cash Flow? 1.0000 Price to C.F./sh. Ratio: 1.1442
Cash Flow / Assets >.10? 1.1676
NEU NewMarket Corp. Overall Zenith Index: 1.2872
Financial Statements |
Financial Ratios |
. . . . . . . . . . . . 1 = Highest , 10 = Lowest
Market Grader |
Intrinsic Value |
Intrinsic Value by Discounted Cash Flow Method:
Intrinsic Value |
Intrinsic Value by Projected Earnings Growth Method:
Stock Scout |
We find "Scout" to be a bit biased toward the high end, so anything under a 6 is considered a negative, 6 and above, positive.
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Orders to Buy or Sell:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Stock Report |
Management's Discussion of Results of Operations Excerpts |
Moving Average Chart |
Right Time Study |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility. Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.
Results for NewMarket Corp.:
Symbol? NEU
Total Months Available: 66
Months in Cycle? 4
Months Covered by Periods: 12
Period 1 Period 2 Period 3
H1 L1 H2 L2 H3 L3
65.10 27.82 87.76 61.90 121.13 80.28
RANGE = 121.13 TO 27.82 Close = 114.77
CHANNEL = 80.28 TO 65.10 Degree = 2
Volatility = 13.23% Index = 2
Intraday Chart |
20 Days:
Stock Fetcher |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
The corresponding trades for the above chart are shown in tabular form below.
Recommendation |
| Factors | Weighted Points |
|---|---|
| News | + 1 |
| Comparison | - 1 |
| Industry | + 1 |
| Bond Issue | + 1 |
| Zenith Index | + 1 |
| GAAP vs. non-GAAP Earnings < 1% | + 1 |
| Cash Flow | + 1 |
| Ratios | + 1 |
| Market Grader | + 1 |
| Intrinsic Value DCF | - 1 |
| Intrinsic Value DDM | + 1 |
| Stock Scout | + 1 |
| Projected Earnings | - 1 |
| Research Reports | + 1 |
| Analysts | - 1 |
| Executive Perquisites | + 1 |
| Insider Activity | + 1 |
| Institutional Activity | + 1 |
| Management Reporting | + 1 |
| Short Interest | - 1 |
| Sentiment | + 1 |
| Standard & Poor's | + 1 |
| Moving Average | - 1 |
| Right Time Study | + 1 |
| Stock Fetcher | - 1 |
| Point & Figure | + 1 |
| Wall Street Analyzer | + 1 |
| Marketspace Chart | + 1 |
| Time Series Chart | + 1 |
| Neural Network | + 1 |
| Stock Options | + 1 |
| Ultimate Trading Systems | + 1 |
| Total | + 17 |
Place 260 shares of NewMarket Corporation (NEU) on the Active List.
