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Element Solutions Inc

ESIAbove valueExpectations · demanding

Held by 2 superinvestors.

Price$33.112026-10-22 close · Yahoo Finance
Holders2
Total value$1.5M

SEC 10-K · fundamentals

Business quality

As of 2025-12-31

Valuation basis: trailing twelve months to 2026-09-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+3.8%
Net margin
7.5%
ROE
7.1%
FCF margin
8.9%
Revenue $1.85B → $2.55B · 6y
What makes a business high quality

Valuation · value band

Above fair value

$8/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$33
cheaperpricier

Zero-growth floor

$7

Central IV

$8

Optimistic top

$20

Element Solutions Inc (ESI): Two methods value the business — a conservative owner-earnings DCF and a growth-credited Greenwald estimate, $7–$20 / sh. Today’s price sits above both (price $33 as of 2026-10-22).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

Revenue growth 0% (lower of historical trend and fundamental cap, capped by moat) · moat 10 yr · discount 12.9% · Zero-growth downside $7

Price as of 2026-10-22 · yahoo · DGS10 5.1% @ 2026-10-21.

Method & numbers

Model cautions

  • The two methods’ midpoints differ materially — growth assumptions warrant review (over 20%).

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $7.46 – $9.04 · Greenwald $13.13 – $20.09 (neutral $16.85) · zero-growth base $10.01 · reproduction $5.17

Moat Franchise (moat) · terminal value 30% of present value · owner-earnings yield 3% vs 10Y 5.1%.

Graham earnings-power value (normalized NOPAT)$6.82 – $10.01 / sh

Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.

Years: TTM 2026-09-30, 2024, 2023, 2022, 2021

v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 119% (> 50%); estimate is degraded. Share-based compensation is left as a real expense (not added back).

Buffett owner-earnings value$8.01 – $9.45 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 11.1–13.1% band (9–11% base + 2.1pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-09-30, 2024, 2023, 2022, 2021

v1 simplifications: Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 119% (> 50%); estimate is degraded. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 2.1pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 7.2 years of owner earnings, adding 2.1pp of cost-of-equity risk premium.

Reproduction value = tangible net assets $-663.40M + capitalized R&D $154.80M（FY 2026, 2024, 2023, 2022） = $5.17 / sh. Reproduction value = intangible-inclusive net reproduction (tangible net assets + acquired-intangible reset proxy + capitalized R&D), ÷ diluted shares; tangible net assets alone are negative for this asset-light franchise.

Moat reading: Franchise test compares earnings power (EPV) against reproduction value (tangible net assets + capitalized R&D). EPV well above reproduction value signals a moat; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a narrow moat · competitive-advantage period ≈ 10 years.

Growth value: if the moat holds for 10 yr at ROIIC ≈ 188%, $3.13–$10.08 / sh (neutral $6.84). Conservative, not a forecast.

Window TTM 2026-09-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 21% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.

Baseline 9%–11%, net debt ≈ 7.2 years of owner earnings → +2.1pp cost-of-equity premium → effective 11.1%–13.1%.

Owner-earnings DCF: growth g₁ 0% · OE FY TTM 2026-09-30, 2024, 2023, 2022, 2021 · Discount band: 11.71%–14.08% (DGS10 +4.5% to a 12% strict end, each +2.08pp for leverage premium, as of 2026-10-21). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp. Two-method midpoint gap 69%.

Valuation basis: trailing twelve months to 2026-09-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about 28.6% a year in owner-earnings for the next few years. Revenue actually grew 4.6% a year.

The market wants it well ahead of its own track record.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

2 holders · $1.5M combined · this quarter +0 opened / -0 exited

This quarter2 trimmed
Holders 1 → 2 · last 7 quarters
  • Ray Dalio
    Value$924,297Weight (prev→now)0.0% → 0.0% ▼
  • Lee Ainslie
    Value$611,773Weight (prev→now)0.0% → 0.0% ▼

SEC 13F · notes

Written summary

Element Solutions Inc (ESI) is held by 2 of the superinvestors tracked on Compounder, with a combined $1.5M in reported 13F value. The largest position belongs to Ray Dalio, where it makes up 0.0% of the portfolio.

Other notable holders by value include Lee Ainslie (0.0% of its book).

In the quarter ended 2026-06-30, 0 of the tracked filers opened a new position in ESI, 0 added to existing ones, 2 trimmed, and 0 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

Also held by these investors

Investors holding Element Solutions Inc (ESI) also commonly hold →

ESI's price is not below its conservative value band. See current strike-zone stocks

Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14· Yahoo Finance as of 2026-10-22· SEC 10-K + 10-Q (XBRL) as of 2026-09-30 · filed 2026-10-22·FRED 10-year Treasury (DGS10) as of 2026-10-21

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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