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DowDuPont: The Stock Will Likely Head Lower Before It Heads Higher

October 28, 2018

Summary: 

- DowDoPont recently reported a multi-billion dollar goodwill impairment charge related to its Ag business.

- However, the impairment is a non-cash charge and does not materially impact the long-term bull case for this global company.

- I am long DowDuPont and I recently added to my position.

 

DowDuPont ($DWDP) is like most other chemical companies in today's environment, in that, the stock has not performed well so far in 2018. To this point, DWDP shares are down over 25% on a YTD basis.

 

However, it's important to note that DWDP shares have been impacted by more than just a broader market selloff, with a great example being the fact the stock dropped by over 6% when the company announced that it would be booking a $4.6B non-cash impairment charge related to its agriculture ("Ag") business. While DowDuPont will likely face further downward pressure in the near-term, I believe that DWDP shares are still worthy of investment dollars.

 

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