Ashland (ASH 0.18%) is a chemicals company that also happens to own Valvoline. It's dealing with two notable issues right now -- sluggish economic growth and its own efforts to rejigger its portfolio. Continued success with the latter could lead investors to rethink how they value the company. So here are three reasons Ashland stock could rise.

The Valvoline spin
The biggest thing going on at Ashland right now is the attempt to spin off Valvoline, the motor oil and oil change business that accounts for roughly 40% of revenues. The thing is, Valvoline really has its own brand identity and a vastly different business model than the rest of Ashland's chemical focused businesses. So a spinoff makes sense in many ways, even though some large shareholders would rather the transaction not take place.

Ashland is two brands in one. Source: Ashland.

This is really very different from, and lot simpler than, what's going on at Dow Chemical (DOW) and DuPont (DD). This pair is linking up while both are struggling with the goal of cutting costs and then breaking up into as many as three companies. Investors have rewarded this pair despite the fact that the total transformation is years away and incredibly complex. Ashland's break is child's play in comparison and should be over and done with by the end of the year.

Indeed, if Ashland does successfully spin off Valvoline, it will allow the two entities to focus on their core operations and give investors the opportunity to value each of the parts on its own merits. Valvoline, for it's part, has been doing quite well, with Ashland CEO Bill Wulfsohn explaining during the company's fiscal first-quarter conference call that "the Valvoline team delivered record Q1 earnings." So, unlike Dow and DuPont, Ashland is set to provide an asset with real value to shareholders in short order.

So it's reasonable to expect that Valvoline will be greeted warmly by the market and, on balance, provide investors with a net benefit. But what about the chemicals businesses? That's going to be a harder sell right now, but there's good things going on there, too.

Getting tough in a tough market
To be honest, the chemicals business will benefit most if demand and pricing in the chemicals markets it serves pick up. For example, it sells into the oil and gas drilling market, which is feeling the sting of falling commodity prices. That's a big headwind, and there's not a whole lot the company can do about the broader trends in the chemicals business. However, it is working hard to control the aspects of its business that it can control.

Specifically, Ashland is working to get a handle on costs and improve its business mix. On that score, the CEO noted that "while overall revenues declined the Ashland team drove a 240 basis point improvement in EBITDA margins versus prior year." Despite a difficult sales environment, Ashland has been able to aggressively control costs and improve its efficiency. That's being hidden by the broad weakness in the chemicals markets.

And there are some key areas to watch, like pharmaceutical, personal care products, and coatings. These are three areas on which the company is focusing and that managed to put up solid results despite the overall weakness. At some point, the company's successful navigation of the current market will start to shine through. And it probably won't require a full-on industry upturn, just some industry stabilization.

To be fair, a global recession would hurt Ashland. But anything from a flat market to an uptick would likely lead investors to see the solid progress the company has made.

But maybe sooner
There's a wild card here, however. That's because part of Ashland shifting its business around has involved divestitures. Those asset sales helped to depress the top line at a bad time for the broader industry, making Ashland's performance look worse than it really has been of late. For example, when it sold its water technologies business it lost roughly $1.7 billion in annual revenues.

A lot of hard work has remade Ashland's business. Source: Ashland.

The timing of this is important. However, since the sale was completed in August, that means those revenues are still in the year-over-year sales comparisons. That's going to change later this year, and Ashland's top-line results will start to look a lot better relative to previous periods. Investors are likely to react well to stronger year-over-year comparisons even if the broader chemicals space is still struggling.

Down for a reason
Ashland's shares have fallen more than 25% over the past year. There are some good reasons for that, but it doesn't mean that Ashland isn't performing well operationally. Yes, a broad industry upturn will do far more for the company's results and investor perception than any other factor. But there are at least three reasons to think Ashland's stock could rise before that.

The big ones are the company's efforts to create value for shareholders via a successful spinoff of Valvoline, the continuation of solid operational improvements despite the difficult market, and a new revenue baseline without the headwind of divestitures. So if you're watching Ashland, pay attention to this trio, they could lead to higher pricing. And that uptick could happen before the broader chemicals industry starts to strengthen since so much of what Ashland is doing is structural in nature.