NEW YORK (TheStreet) -- Shares of Platform Specialty Products (PAH) are climbing 1.10% to $26.94 on heavy trading volume after the company announced the pricing of 15.8 million shares of common stock in its public offering.
Platform produces high-technology specialty chemicals and provides technical services. The business involves the formulation of a broad range of solutions-oriented specialty chemicals, which are sold into multiple industries, including agrochemical, animal health, electronics, graphic arts, plating, and offshore oil production and drilling.
The company priced the 15.8 million shares of its common stock at a public offering price of $26.50 per share.
Underwriters were granted a 30-day option to purchase an additional 2.38 million shares of its common stock. The offering will close on June 29, 2015.
The net proceeds from the offering will be used to fund working capital and future acquisitions, including a portion of the consideration and related fees payable in connection with the previously announced acquisition by Platform of the Electronic Chemicals and Photomasks businesses of OM Group (OMG), the company said.
Separately, TheStreet Ratings team rates PLATFORM SPECIALTY PRODUCTS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate PLATFORM SPECIALTY PRODUCTS (PAH) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 260.0% when compared to the same quarter one year ago, falling from -$7.42 million to -$26.70 million.
- Net operating cash flow has significantly decreased to -$70.05 million or 432.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, PAH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- PLATFORM SPECIALTY PRODUCTS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This year, the market expects an improvement in earnings ($1.23 versus -$1.58).
- The gross profit margin for PLATFORM SPECIALTY PRODUCTS is rather high; currently it is at 54.45%. Regardless of PAH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PAH's net profit margin of -4.99% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: PAH Ratings Report