Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Sometimes, events cause a company's name to take on a meaning that's probably ... well, that's probably a bit different from what the corporate founders had intended to imply. That's the case with Innospec
So what: Today's sell-off looks like a photo negative of the unexplained run-up in share price that we saw back in March. Back then, fellow Fool Brian Pacampara suggested it was a rise in oil prices that had investors piling into Innospec as a "fuel efficiency play." Logically, CME Group's
Now what: Maybe that's the right call, maybe not. Here's what I do know: A few months back, I took a cue from Berkshire Hathaway's
Today, though, I look at Innospec and see a company that while arguably undervalued on a P/E basis, isn't generating the kind of free cash flow I'd need to see before buying it. Whether you join in the Innospec sell-off, or decide to ride it out, my advice is simply this: For heaven's sake, don't buy more. Not until the company gets its cash-generating machine back in working order.
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