NEW YORK (TheStreet) -- Shares of Dow Chemical (DOW) rose 0.5% to $51.91 in early market trading Tuesday after CEO Andrew Liveris appeared on Jim Cramer's Mad Money show on CNBC on Monday.
Cramer and Liveris spoke about Dow's transformation from a commodity company to a specialty chemical company.
Liveris said that Dow views productivity as "a journey, not a destination." To that end, the company continually takes a "less is more" approach and focuses on technology and its customers. For example, Dow's portfolio of products functions regardless of the price of oil, which had not been the case for the company in the past.
Cramer asked Liveris about Europe, and the CEO said demand exists in countries such as Germany. With a strong dollar, he added, Europe's economy is finally progressing.
Dow is currently in the process of spinning off its chlorine business. Liveris noted that Dow started in the chlorine business, but the company has come to understand that its capital should be invested more in higher-growth areas.
Insight from TheStreet's Research Team:
Dow Chemical is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:
Dow Chemical ( DOW:NYSE; $51.69; 1,750 shares; 3.47%; Sector: Materials): The shares were up this week following a strong earnings report last week in which EPS beat by 11%. Not only was first-quarter 2015 Dow's tenth straight quarter of EPS, EBITDA and EBITDA margin growth, it was also its best margin quarter since 2005, a testament to the company's revamped portfolio characterized by innovation-driven growth, differentiated products and more sustainable pricing.
While EPS will likely be down 4% in 2015 due to FX, lower olefins spreads and Sadara start-up costs, as well as the fact that buybacks have been suspended until the chlor-alkali transaction is closed (year-end), we see upside in 2016 as buybacks resume ($5 billion-plus) and recent project startups (Sadara, PDH) drive a resumption of growth. We also view the valuation as attractive, with the shares trading at just over 14x estimated 2016 EPS. Our target is $60.
- Jim Cramer and Jack Mohr, ' Weekly Roundup' originally published 5/1/2015 on ActionAlertsPLUS.com.
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