Fund Exit Puts Olin Under Fresh Scrutiny
Olin (OLN) is back in focus after Madison Small Cap Fund disclosed it has fully exited the position, citing a prolonged chlor alkali downcycle and limited near term catalysts.
Olin’s share price has bounced in the very short term, with a 1-day share price return of 3.89% and a 7-day share price return of 9.31% to US$16.56. However, momentum has been fading over a longer horizon as the 90-day share price return declined 25.37% and the 5-year total shareholder return fell 68.57%. This frames the fund’s exit against a backdrop of extended weakness despite recent buybacks and operational pullbacks.
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So is Olin’s latest bounce saying something new about the underlying chemicals and ammunition business, or just reflecting investors quickly resetting sentiment after the fund exit and preparing for a valuation reset next?
Most Popular Narrative: 16% Undervalued
Olin’s most followed valuation story points to a fair value of $19.81 against the latest close at $16.56, which places the recent bounce in the context of a market that still prices in a wide margin of caution.
The planned merger with Huntsman and formation of OlinHuntsman, with identified cost and integration synergies of more than US$400 million and pro forma 2025 revenue of about US$12.5b, is expected to create a more vertically integrated portfolio that can lift combined EBITDA and improve overall net margins.
See why 16 investors see Olin as 16% undervalued.
Result: Fair Value of $19.81 (UNDERVALUED)
Still, the story can break if chlor alkali and vinyls pricing stays weak for longer, or if the Huntsman merger underdelivers on its promised cost savings.
Find out about the key risks to this Olin narrative.
Next Steps
Opinions differ on whether the broader market is being too cautious or not cautious enough on Olin right now. Act while the narrative is still forming by weighing both sides of the story through the 3 key rewards and 2 important warning signs
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