Three Stocks With Good Chemistry

With U.S. economic growth looking suspect and feedstock prices soaring, it's not so obvious for investors to throw in their lot with chemicals firms. After all, most of them buy petroleum-based raw materials to produce their compounds, which are in turn used as inputs for various consumer goods. They would seem to be bumped on costs on the one end and squeezed on the other by waning demand.

But I've presented a trio of chemical firms over the past two quarters in various tables of my InsiderInsights newsletter that have solidly bullish insider buying profiles. What's more, these stocks have also managed to trade relatively well in this ugly market.

The companies of note are PolyOne(POL Quote), Solutia(SOA Quote) and NewMarket(NEU Quote). Each has a different niche in the chemicals biz, but they all produce compounds that are used in a multitude of everyday products, some of which you probably used today.

My earliest tip that this out-of-favor sector may have bottomed came late last year. In November, five executives at PolyOne purchased nearly $527,000 worth of POL at an average cost of $6.46 a share. Of particular note, VP Michael Kahler doubled his holdings with his buys back then. And after smartly selling shares back in May of 2006 for over $9 a piece, VP Robert Rosenau has chosen to increase his stake by 40% at current prices. So far, their seemingly contrarian bets have garnered them a 19% return. ...