Yule Catto is an attractive pick in the chemicals sector

As The Share Centre adds speciality chemicals producer, Yule Catto, to its ‘buy' list, Graham Spooner explains why the company is attractive for investors:

"Investors rewarded by following our tip to ‘buy' Croda may be interested in looking at chemical business, Yule Catto. Having had previous success in the sector we have been keen to find another recommendation and Yule Catto has been on our watch list for some time.

"The company's international exposure is attractive for investors. Q1 figures reported healthy demand for the company's Polymer business overseas, maintaining its leading worldwide position in this market. Investors seeking growth will also be encouraged by the company's recent acquisition in Germany and the potential for improving sales in emerging markets.    

"Investors should be aware that companies within the chemicals sector can be vulnerable to price increases in basic commodities such as oil, which have recently proven to be particularly volatile. This may cause some concerns, however analysts believe the increase in the costs of the underlying materials used by the company can be passed on to the customer.

"The group reported a significant increase in Q1 trading compared to last year with improved performance in the Pharma division and strong profit growth in William Blythe. We recommend investors willing to accept a medium degree of risk to ‘buy' Yule Catto for exposure to a specialist sector.