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BASF Stocks as a Case Study in Corporate Evolution (Part 1)

7 January 2008 - Features - Editor

BASF’s national origins make its stocks worthy of special review. No other country has been as vigorous and pro-active in condemning its own modern history. BASF is a survivor of the Nazi World War II effort, and it has also thrived in the second half of the 20th century. It has matched the best corporations of this country in sustained stock dividends. Moreover, it is strongly poised to play a multifarious global role in the new Millennium. The chemical industry is not exactly recommended as a sunshine sector by any financial advisor, but BASF stock is an unusual commitment to useful and relevant technologies.

The BASF stock story however, is not limited to technological excellence alone. It is a continuing saga of environmental adaptation with clear management traditions of responding swiftly and meaningfully to key social concerns. The stock price history reflects business management excellence, and excellence in execution of strategy. The company blends firm central management with liberal regional autonomies in a manner which even many larger and more profitable should emulate. BASF stocks are worth following, not just from a financial planning perspective, but for object lessons in visionary leadership of global houses of industry.

Environmental Adaptation as a Means of Enduring Stock Value

Any executive with a stock price responsibility is bound to pay occasional lip service to public concerns. Tokenism does not pave the way for stock dividends, and the BASF management has never lost sight of the need to change as per the dynamism of environments in which it has had to operate. This has ensured consistent if plebian business progress, and is also a source of reassurance for international stock investors who want anchors of stability in their portfolios. Risk management, sharp focus on productivity, development of top-quality human resources, and optimal use of cash flows, are four observed facets of BASF management which make it one of the top stocks of the first world.

BASF does not maintain a high public profile, preferring to concentrate on its engine room operations rather than on corporate relations. This is something for investors to appreciate since we want safety of our capital amounts and stock dividends, rather than vacuous statements and image building for top executive benefits! However, it does mean that BASF stock analysis requires deep probing in to its achievements, because it does not trumpet them on its own.

BASF has dramatically reduced its product liabilities since it first entered the chemical field after the demise of Hitler. Each of the myriad new patents it now presents in commercial form is a substantial improvement over earlier product generations in terms of safety. The company has also repeatedly demonstrated its commitments to environmental concerns by discarding relatively toxic brands even if they were cash cows. Anyone who holds stocks in a chemical business must dread another Bhopal, but BASF stock is relatively sound in this respect.

People who own pharmaceutical sector stocks will be familiar with the drastic effects of patents on stock price. Generic producers from India depend almost entirely on patent expiries in the United States in order to generate cash for their stock dividends. BASF strikes a discordant and defiant note in this matter. It has continued to produce and to market its original molecules even after they have become generics. The company does not fight shy of dealing in off-patent discoveries of its competitors either. Moreover, it does not conduct its generic operations in any surreptitious manner, but boldly under the flagship corporate stock.

BASF Stocks as a Case Study in Corporate Evolution (Part 2)

 


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