Alt Capital

$OCINF OCI Global is currently trading at ~$7.50/share, while there’s clear line-of-site to ~$10/share in net asset value by end of 2025 *excluding* the value of its European Nitrogen business, which I estimate could be worth an additional $2-$3.50/share. The Company is currently evaluating strategic options for both the EU Nitrogen business and OCI as a whole. EU Nitrogen is Europe’s second-largest integrated nitrates fertilizer producer and a global leader in melamine – plus it owns a strategically located ammonia import terminal in the port of Rotterdam. At current prices, you are effectively getting this business for less than free. I first wrote about this idea in December 2024 and recently posted my updated thoughts – link below.

Thoughts from the $MAGN earnings today: 1) I was not expecting this to be a breakout quarter for MAGN. The CPGs - $PG, $CLX, $KMB - last week all generally reported that demand stabilized in calendar Q2 but has not yet normalized. Category growth rates are still below long-term norms. 2) MAGN's North America business looks well-positioned. Management noted volumes were stable/slightly positive there this Q. Some of the strength here is likely tariff related as MAGN's customers have been sorting through their supply chains and MAGN has benefitted from being a local supplier. 3) MAGN's South America business must have been down pretty big this Q given (i) Americas organic volumes declined 6%, (ii) North America makes up almost 75% of Americas revenue, and (iii) North America was flat/slightly positive. By that math, volumes in the South America business must have been down by 20%+. While this business has clearly struggled, I don't view this as being too material to the overall credit profile of the business. The South America business is 15% of total revenue, or roughly $500M annually. I assume it has lower margins than the rest of the business but assuming it’s the same (~10%), it represents $50M of EBITDA exposure on $360M total for the company. Mgmt clearly acknowledged this business has lost some market share but was confident this business would stabilize, and they expect to feel much better about it going forward. 4) Project CORE – overall this seems manageable and smaller than what I thought a footprint rationalization plan could potentially look like. $20M of costs to achieve $20M of annual cost savings beginning in FY26 after doing a "thoughtful and thorough evaluation of the portfolio" tells me we likely don't have a larger issue here, and it’s not very material in the context of a business with $570M of liquidity, generating close to $100M of FCF annually. 5) Cluster insider buying – while not new, worth reiterating here the open market buys from the CEO and six different directors during May/early June. These give me confidence in the overall competitiveness of the business - they would not be buying if they viewed this as a melting ice cube. Will be interested to see the FY26 guidance next quarter as more of the merger cost synergies and footprint rationalization savings roll through the numbers. $400M of Adj EBITDA in FY26 seems reasonable to me assuming they capture half of the merger cost synergies and $20M from footprint rationalization, and assuming no improvement from cyclical lows. At a 6x multiple, that’s $2.4B EV, $615M market cap or ~$17/share. Obviously if we get any improvement in underlying fundamentals, I expect it to go much higher, but may still be too early to see the thesis fully play out. Also will be good for the company to get its first 10-K on file and some more coverage going into next year.