4-Star Stocks Poised to Pop: Ashland

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Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified chemical maker Ashland (NYSE: ASH) has earned a respected four-star ranking.

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

Ashland facts

Headquarters (founded)	Covington, Kentucky (1918)
Market Cap	$705.1 million
Industry	Diversified Chemicals
TTM Revenue	$8.44 billion
Management	Chairman/CEO James O'Brien (since 2002) CFO Lamar Chambers (since 2008)
Business Segments	Performance Materials, Distribution, Valvoline, Water Technologies
Return on Capital (average, last three years)	3.1%
Dividend Yield	3.1%
Competitors	Rohm & Haas (NYSE: ROH) ExxonMobil (NYSE: XOM)
CAPS members bullish on ASH also bullish on	Freeport-McMoRan (NYSE: FCX) ConocoPhillips (NYSE: COP)
CAPS members bearish on ASH also bearish on	Caterpillar (NYSE: CAT) Pfizer (NYSE: PFE)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 244 of the 266 members who have rated Ashland -- some 92% -- believe the stock will outperform the S&P 500 going forward. These bulls include All-Star GirlScoutDad, who is ranked in the top 10% of our community, and TSIF.

Last month, GirlScoutDad tapped the stock as an interesting income opportunity: "solid fundamentals, secure dividend = poised to grow with the eventual recovery."

In a pitch from January, TSIF also highlights Ashland as a good bet to rise from the ashes:

Ashland, highly diversified, is in enough of the WRONG industries that it's taken a beating. Despite the loss last quarter and the low margins Ashland is still very strong financially with good cash flow and very reasonable debt. Their oil filter and oil change segment ... may take a slight recession hit, but the products are still needed. Lower oil prices should actually help. The other segments should do well with a moderate recovery.

I haven't done the ashy work on Ashland yet, but there's a good chance the company is trading at a substantial discount to the sum of its parts. The stock currently sits at a paltry price-to-book of 0.2, and as yet another bull, BSHumphreyII, puts it, "Valvoline alone has to be worth almost half a billion. Big-time buy."

Ashland's been gradually moving out of its non-core segments (refining and construction) over the last few years to focus on chemicals, so heaps of that hidden value could be unlocked with further asset sales. Still, with a price tag of 1.3 times cash flow, it's tough to envision how patient Fools won't see a return of and on their capital over time -- breakup or not.

But what do you think about Ashland, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.