$2.10
$16.50
bear $2.10
base $9.00
bull $16.50
margin of safety $4.50
market price* $5.34
Orion makes carbon black, a fine black powder used to reinforce tires and other rubber goods (its Rubber segment, $1,188M of 2025 sales) and to add colour, conductivity and protection in coatings, plastics, batteries and printing inks (its Specialty segment, $619M). It runs 14 wholly owned plants across Europe, the Americas, South Africa and Asia plus a jointly owned plant in Dortmund, Germany, and is building a new plant in La Porte, Texas. Sales have been essentially flat at $1.8 to 2.0 billion since 2022. Owner earnings. We measure what the business leaves for shareholders after operating cash flow, stripping out swings in receivables, inventory and payables, subtracting stock compensation, and subtracting only the capital spending needed to keep the plants running. Per share, that came to about $(0.57) in 2020, $1.40 in 2021, $0.54 in 2022, $0.83 in 2023, $0.19 in 2024 and $0.64 in 2025. Two items matter. First, the company treats spending on the La Porte plant ($66.4M in 2024, $66.9M in 2025) as growth investment, and so do we; the rest of 2025 spending ($94M) was below depreciation of $132M. Second, 2024 absorbed a roughly $59M cash loss and fees from fraudulently induced outbound wire transfers by unknown third parties, a criminal scheme of which the company was the target, as disclosed in its 2025 10-K; $6.9M was recovered in 2025; without it 2024 would be near $1.21. The 2025 goodwill write-down of $80.8M is non-cash and does not enter owner earnings. We anchor on about $0.65 per share (roughly $37M a year), the median of 2020, 2021, 2022, 2023 and 2025, leaving out 2024 for the wire-transfer loss. Cash flow before working capital was the same in 2023 as reported once the one-off $131M receivables release from new payment terms and receivable factoring is removed. Growth check. Owner earnings rose from $0.19 to $0.64 in 2025, but 2024 was depressed by the wire-transfer loss, so that rise is not a trend. We assume zero growth in year one. Recent trend. In the first half of 2026 sales rose to $960M from $944M, but the company swung to a net loss of $8.1M (from a $18.1M profit), operating cash flow fell to $14.9M from $54.1M, and capital spending eased to $61.5M. That is one half-year and does not move our anchor, but it is a caution. Base case, about $9 per share. Owner earnings stay at about $0.65 per share for 30 years and then end. What is in the bag: a plant network already built and maintained, sales that have held near $1.8 to 2.0 billion through a pandemic and a commodity spike, and Rubber volume of 714.8 thousand tonnes in 2025, up 3.7%. What we left out: any benefit from La Porte (construction has been slowed because of slow U.S. electric-vehicle adoption; $175M is already invested), share buybacks, price increases, and margin recovery. The buybacks are funded from operating cash flow already counted. Bear case, about $2 per share. Owner earnings fall to about $0.25 per share (roughly 40% of the anchor) for 12 years. The evidence: 2020 was a loss on our measure, 2024 was thin, and the first half of 2026 is weaker again. Gross debt was $982M at the end of 2025 against $254M of liquidity, and interest cost was $62M in 2025, so a squeeze on margins falls almost entirely on shareholders. Serial writedowns (the $80.8M goodwill charge in 2025) also point to acquired businesses not earning what was paid for them. Bull case, about $16.50 per share. Owner earnings of about $1.20 per share for 30 years, a level the company has already reached: $1.40 in 2021 and about $1.21 in 2024 excluding the wire-transfer loss. This needs the cost savings the company launched in 2025 to hold and volume gains to continue, while capital spending stays near the $94M seen in 2025 outside La Porte. What would make this wrong. If mandatory environmental spending, which was $67M in 2022 and $29M in 2023 of the U.S. emissions-control programme, recurs, our maintenance spending is understated. If tyre demand falls structurally, the 30-year runway is too long. We could not tie 2020 exactly (about a $10M difference in the reconciliation), and could not confirm from the filing a maintenance-only capital budget, so we used the company's own description of La Porte as growth investment and left the rest as required spending. Debt is high relative to earnings, so the shares carry more risk than the business itself. Value estimates are per share and use a flat 6% discount rate.