Market Driven Portfolio Management

Question: Discuss about the Market Driven Portfolio Management. Answer: Business descriptions About Dow The company has make the value with the help of the diversified portfolio as well as the market-driven portfolio, which have the specialty about the chemicals, advanced materials, agro sciences, and the plastic business for about the 119 years. The company made promises about the changes in the advanced technology, and the innovation regarding the problems that had faced by the world and enhanced the better quality of life for the present generation as well for the future. The company also makes the long-term sustainable value for its customers as well as the shareholders. It is the largest chemical company of the world that delivers the various solutions as per the needs of the market and challenged with the help of the experts of the Research development (DOW Chemical Company, 2016). Products The products of the company are only two nonionic and the anionic, who is further divided into the several parts: Nonionic includes: Alkyl polyglucosides Branched secondary alcohol ethoxylates Low foam surfactants Nonylphenol ethoxylates Octylphenol ethoxylates Secondary alcohol ethoxylates Seed oil surfactants Specialty alkoxylates Specialty ethoxylates Anionic includes: Alkyldiphenyloxide disulfonate Dioctyl sulfosuccinates Phosphate esters Sulfates and suffocates (Dow Chemical Company, 2016). Industry overview and the positioning Segment: Health, nutrition, and the consumers. Operating segments involves: Agricultural sciences It includes: Crop protection Seeds A solution of the consumer involves: Customer care Dow automotive system Dow electronic material An infrastructure solution includes: Dow building and the construction. Dow coating material Energy water solutions Performance monomers The Performance materials and the chemicals include: Chlor-akali and the Vinyl Epoxy Industrial solutions Polyurethanes The Performance plastics include: Dow Elastomers Dow Electrical and the telecommunications Dow packaging Hydrocarbons (DOW Chemical Company, 2016). The Dow reports full-year results 2015: The EPS rises to $2.94 or $0.93 on the operating basis. The margin of the operating EBITDA has extents to 20.9% along with the growth of all segments. EBITDA reaches at the higher of $9.6 billion on an operating basis or on the reporting basis $13.3 billion. The company provides the full year cash from operations of $7.5 billion. There has a growth of capital about 12.1% on capital basis and 19.6% on reported basis. Target group: Agricultural needs, and the needs of the energy sector, personal care, home needs, and personal electronics. Positioning: Making the value with the help of the cost Rigor and the discipline. SWOT analysis Strength It has varied into the special chemical, advanced materials, agro sciences and the plastic business. They had the various ranges of the products and the solutions, which has based on the technology, and provides to the customers across 160 countries. It has integrated with the operation of the manufacturing across the world. The strategic joint ventures are helping the company for its product portfolio. The portfolio of the wide product involves the chemicals, plastics, performance chemicals, catalyst, coating, crop technology, crude oil, and the natural gas. The company has the worldwide workforce about the 40000 people. Prime participation such as the safety academy, nature conservancy has combined with the activities Of the CSR. Weaknesses Risk is high because of the over dependence on the suppliers. The problems related to the law and legal, which leads to diminishing the brand image of the company and has the financial implications. Because of the espionage allegations, the credibility is tarnished. Opportunities Extension of the capacity about the polyolefin encapsulates films. For the innovation performance, it has leveraged for the global leadership. Demand has rise for generating the renewable energy and the conservations, and increases the productivity of the agriculture. For helping the company to create its value, they diversified the non-core assets. Threats Revenue decreased as well as the economic conditions. The cost of the environment compliance has an impact on the margins. There is a negative impact of the intense competition on the operation of the results of the company. Competition Bayer AG Exxon Mobil Corporation Chevron Corporation (MBAskool.com, 2016). Valuation For the valuation, the three methods have adopted: Dividend discount model Dividend cash flows Comparable company valuation In the first method of valuation, the stock is valued that estimated from the present value of the cash flows. The overall present value of the stock is $34.58. The intrinsic value of the stock is $ 41 and the current value is $52.24 (Stock Analysis Net, 2016). In the second method of the valuation, the stock had valued on the estimation of the present value of the cash flows. The intrinsic values of the common stock are valued to the $48002, the intrinsic value per share is $42.60, and the current value is $52.13. In this method of the valuation, the price-earnings (P/E) of the Dow chemicals has compared with the different competitors for the year 2012-2015. From the comparison, it has founded that the price to earnings of the Dow chemical is less than the DD but high than the BASKY and the AHKSY Financial analysis Income statement The earnings before interest and tax were increases in 2013 but it decreases in 2014 and then in 2015, it starts increases. The sales of the company were increases from 2012 to 2014 and then start decreasing in 2015. Balance sheet The total assets of the company were also decreases from the 2012 to 2015. The total liabilities are also decreases from the year 2012 to 2015. The total equity was increases in 2013 but starts decreases in 2014 and then increase in 2015. Cash flow statements The cash from operating activities were increases in 2013 but decrease in 2014 and then started increase in 2015. The cash from investing activities has decreasing from year 2012 to 2015. The cash from financing activities are also decreasing from the year 2012 to 2015. The free cash flow to equity were increased in 2013 and the 2014 but its start decreasing in 2015 (Stock Analysis Net, 2016). References DOW. (2015). Future: focused science based market driven. Retrieved on 27 september 2016 from https://storage.dow.com.edgesuite.net/dow.com/investors/2015_Dow_Chemical_Annual_Report.pdf MBAskool.com.(2016). DOW chemical SWOT analysis, USP Competitors. Retrieved on 27 september 2016 from https://www.mbaskool.com/brandguide/industrial-products-and-chemicals/7826-dow-chemical.html DOW.Chemical.company.(2016).DOW Surfactants-products. Retrieved on 27 september 2016 from https://www.dow.com/surfactants/products/ DOW.Chemical.company.(2016). About DOW. Retrieved on 27 septemebr 2016 from https://www.dow.com/en-us/about-dow/dow-sports DOW.Chemical.company.(2016). Operating segments. Retrieved on 27 september 2016 from https://www.dow.com/en-us/about-dow/our-company/operating-segments Stock.Analysis.Net.(2016).DOW Chemical company. Retrieved on 27 september 2016 from https://www.stock-analysis-on.net/NYSE/Company/Dow-Chemical-Co/DCF/Present-Value-of-FCFF#top Stock.Analysis.Net.(2016). Statement of cash flows. Retrieved on 24 september 2016 from https://www.stock-analysis-on.net/NYSE/Company/Dow-Chemical-Co/Financial-Statement/Statement-of-Cash-Flows