4-Star Stocks Poised to Pop: Rockwood Holdings

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty chemical company Rockwood Holdings (NYS: ROC) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Rockwood's business and see what CAPS investors are saying about the stock right now.

Rockwood facts

Headquarters (Founded)Princeton, N.J. (2000)
Market Cap$3.21 billion
IndustrySpecialty chemicals
Trailing-12-MonthRevenue$3.51 billion
ManagementChairman/CEO Seifi Ghasemi
CFO Robert Zatta
Return on Capital (Average, Past 3 Years)6%
Cash/Debt$235.8 million / $1.79 billion
CompetitorsDuPont (NYS: DD)
Sociedad Quimica y Minera (NYS: SQM)
FMC (NYS: FMC)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 334 members who have rated Rockwood believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars gtfann and nrlbuild, both of whom are ranked in the top 10% of our community.

This past summer, gtfann noted that Rockwood "has an excellent portfolio of niche businesses that are market leaders (No. 1 or No. 2 market position globally), technology leaders, and with limited exposure to oil prices due to an inorganic focus and energy purchases at a ~5.7% of sales."

Rockwood even trades at a cheapish price-to-cash flow of 7.1. That represents a discount to competitors like DuPont (9.4), FMC (17.4), and Sociedad Quimica y Minera (21.7).

CAPS All-Star nrlbuild elaborates on the bargain opportunity:

Very well diversified customer base across industries. Their product markets are global. The[y] make specialty products that require difficult and specific technology which (hopefully) provides some barriers against competition. Well positioned in the lithium market which should produce growing demand via battery technology in the coming years. Currently appears undervalued, management has been cranking out some great performance despite difficult conditions.

What do you think about Rockwood, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackRockwood?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Rockwood. Motley Fool newsletter services have recommended buying shares of Sociedad Quimica y Minera. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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