Of all the company’s divisions, agriculture is the only one making money. A whopping 59% of DuPont is exposed to autos, transports, industrials and other economically sensitive businesses like housing. Cramer doubts the company can prop itself up using only the strength seen in ag.
There’s also a pension problem at DuPont. So much so that this and the autos exposure, not potential earnings or cash flows, could threaten the company’s dividend. The hard numbers: Next year’s earnings could lose between 45 cents and 58 cents due to pension costs.
And, despite all this negative news, DuPont’s already had a good run. The company pre-announced a bad fourth quarter on Dec. 4 and the popped 8.5% anyway (thanks to exhausted sellers and hopeful buyers). PPG, Cramer’s favorite chemicals stock, rose only 1.5% during the same period.
So with an unsafe dividend, exposure to slowing industries and that big run in a short time, Cramer thinks DuPont is a sell.
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