NEW YORK (TheStreet) -- The Dow Chemical Company (DOW) was rising 5.4% to $45.40 on Tuesday after Daniel Loeb revealed that his hedge fund, Third Point, had taken a stake in the company.
According to The Wall Street Journal, Loeb revealed the news in a letter to investors released on The Harvest Exchange, a site where investors can share ideas. Loeb said that Dow Chemical is currently Third Point's largest stake but did not reveal his position.
Loeb called for a share buyback and a spinoff of its petrochemicals business to improve profitability.
"We believe the benefits from a spinoff, including financial uplift from operational improvements at Dow Petchem Co. and the potential valuation uplift from increased business focus and disclosure, far outweigh the supposed integration benefits," Third Point said in the letter, according to Bloomberg.
TheStreet Ratings team rates DOW CHEMICAL as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOW CHEMICAL (DOW) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, solid stock price performance, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows: