PPG Industries (PPG) has a long history as a wonderful operation within the United States. It has operated in almost every economic condition one could imagine thanks to it being founded in 1883. Despite this long history of wonderful performance and operation, the company has been seeing weakness of late. It has been citing for some time how elevated costs are impacting earnings. Recently, the company saw a rise in operating margins, but this does not mean much unless it is sustained. Some input costs such as petrochemical based chemicals are declining but this may not be enough to help earnings grow. In addition to elevated costs, the company saw softer demand from China, probably due to its slowing economy and imposed tariffs from both sides. Additionally, the company sees lower end use demand in the auto market leading to less sales of coatings and paints in general. To top it all off, PPG is getting hit with foreign exchange headwinds which further affect earnings. Many investors like PPG due to its dividend aristocrat status. This is one of the main reasons I have long kept my eye on PPG, but when there is opportunity in many areas of the market at any given time, adding shares of PPG to my portfolio would need to be done at more attractive levels. Finding the right entry point is what we will be focusing on today.

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