For years, Outdoor Holding Company (formerly AMMO Inc.) ( POWW ) tried to be both a high margin digital marketplace (GunBroker.com) and a capital-intensive manufacturer of ammunition. Unfortunately, it didn't work. The low margin manufacturing business obscured the profitability ofI'm a fundamental investor who targets situations where the market has pushed a company’s valuation far out of line with its underlying economics. My professional background in corporate financial analysis has deeply shaped my inv ...

Core Insights - The article highlights the increase in orders driven by a growing defense business as Western nations aim to strengthen their military capabilities with missiles, ammunition, and other military hardware [1] Industry Summary - The defense sector is experiencing a surge in demand as countries focus on enhancing their military strength in response to geopolitical tensions [1]

Company Overview - Olin Corporation (OLN) is currently trading at $24.85, with trailing and forward P/E ratios of 19.62 and 17.99 respectively [1] - The company is recognized for its significant position in the chlor-alkali market, owning the largest producer in the U.S., where the top three players control approximately 70% of the market [2] Financial Performance - Despite being in a cyclical trough, Olin Corporation remains profitable, generating around 9% free cash flow even at depressed earnings levels [2] - The company has a leverage ratio of roughly 3.5x net debt to trough EBITDA, with no significant debt maturities until 2029, and 2033 bonds trading at a premium yield of 6.2% [3] - Olin maintains a 3% dividend and sufficient cash flow to support share repurchases, even at trough earnings [3] Business Segments - Olin's chemical business is complemented by its ownership of Winchester, the second-largest ammunition maker in the U.S., which serves both civilian and government customers [3] - The ammunition segment is projected to decline to approximately $140 million EBITDA in 2025 from $435 million in 2021, but it offers strategic exposure to increased civil unrest and potential election-cycle demand [4] - Recent acquisitions imply a $2.5 billion valuation for the Winchester segment alone [4] Investment Thesis - Olin Corporation presents a compelling cyclical turnaround opportunity, reinforced by Berkshire Hathaway's investment framework [2][5] - The combination of a resilient, cash-generative chemical business and a strategically positioned ammunition segment provides a unique risk/reward profile for investors [5]

Company Overview - Olin Corporation is a leading vertically integrated global manufacturer and distributor of chemical products and a prominent U.S. manufacturer of ammunition [4] - The chemical products produced by the company include chlorine, caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid [4] - Winchester, a division of Olin, manufactures and distributes sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition, industrial cartridges, and clay targets [4] Upcoming Financial Results - Olin Corporation will review its second quarter 2025 financial results on July 29, 2025, at 9:00 a.m. Eastern time [1] - A press release with financial statements and segment information will be distributed after the market closes on July 28, 2025 [1] Conference Call Details - U.S. callers can access the conference call toll-free at (877) 883-0383, while Canadian callers can dial (877) 885-0477, and international callers can reach (412) 902-6506 [2] - The call will also be available via a live webcast, with participants encouraged to pre-register [2] - A replay of the conference call will be available for one year on the company's website, with a telephonic replay accessible for 7 days starting at 12:00 p.m. Eastern time [3]