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David Einhorn Pitches Long Bet on Chemicals Company Solvay

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(Bloomberg) — Greenlight Capital founder David Einhorn said he’s betting on Solvay SA, sending shares of the Belgian company soaring to a record.

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“We think this boring essential-chemicals business will generate attractive, risk-adjusted returns for investors,” Einhorn said Wednesday at the Sohn Investment Conference in New York.

Solvay shares rose as much as 9.4% in Brussels on Thursday. They have gained 43% since the spinoff of chemicals maker Syensqo SA in December, while Syensqo has fallen 6.4%.

The company, a large producer of soda ash — an inorganic compound used for making flat glass — is adding 7% to its capacity by expanding in Wyoming in coming years, Einhorn said.

Solvay also sells peroxides, solvents and silica used in tires, toothpaste and animal feed. Einhorn, 55, said he believes the company has above-average management for a European chemicals firm.

Oddo BHF analyst Stefano Toffano said Einhorn’s comments don’t change anything for him. He remains positive on Solvay’s long-term outlook for stable growth and cash flow generation, and has an outperform rating on the stock.

Einhorn also said it’s a great time to be a value investor, as competition is so small that the opportunities to find companies “with cash-on-cash returns are more abundant than at any time in my career other than at the bottom of a bear market.”

Read More: Einhorn Says Markets ‘Fundamentally Broken’ by Passive Investors

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