NEW YORK (TheStreet) -- Shares of E I Du Pont De Nemours and Co. (DD) - Get Report are up by 1.62% to $72.81 in mid-morning trading on Monday, as one of the chemical company's major investors, Fidelity Investments, is putting pressure on the activist fund Trian Fund Management LP and Du Pont to reach a settlement in what it sees as a "detrimental" proxy fight, Reuters reports.
Fidelity has a 2.5% stake in Du Pont, making it the company's sixth largest shareholder, and Trian owns a 2.7% stake.
Reuters calls Fidelity's involvement as "peacemaker" "unusual" but added that it could result in other mutual fund investors in Du Pont stepping in to help avoid what could potentially become the largest battle of board representation this year.
Separately, TheStreet Ratings team rates DU PONT (E I) DE NEMOURS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DU PONT (E I) DE NEMOURS (DD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, increase in net income, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- DU PONT (E I) DE NEMOURS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DU PONT (E I) DE NEMOURS increased its bottom line by earning $3.89 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $3.89).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 269.2% when compared to the same quarter one year prior, rising from $185.00 million to $683.00 million.
- The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- You can view the full analysis from the report here: DD Ratings Report