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Hawkins (HWKN) Rallies 47% YTD: Will the Momentum Continue?
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Hawkins, Inc.’s (HWKN - Free Report) shares have rallied 46.5% year to date. The rally has resulted in the stock outperforming its industry’s rise of 9% over the same time frame. The company has topped the S&P 500’s roughly 17.2% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #1 (Strong Buy) stock.
What’s Going in Hawkins’ Favor?
In the first quarter of fiscal 2024, the company delivered outstanding results, marked by a remarkable 101.8% increase in net income from the previous quarter’s levels. This remarkable performance was mirrored by a 10% revenue growth from the preceding quarter.
Notably, the Water Treatment segment demonstrated exceptional performance, showing a significant 19% year-over-year revenue growth and an impressive 70% increase in operating income. This achievement underscores the company’s strategic focus on this sector, which involves expanding its core business and effectively integrating recent acquisitions. The addition of EcoTech Enterprises in July further solidified the company’s position in the water treatment market.
The company's astute pricing strategy is one of the key drivers behind the expansion of the Water Treatment segment. In response to rising raw material costs, the company adapted its product pricing effectively, boosting sales.
While maintaining a cautious stance, the company holds an optimistic outlook for the Industrial segment. Acknowledging potential challenges related to economic pressures affecting customer demand, the company remains confident in its ability to navigate these obstacles and sustain its growth trajectory.
Moreover, the company's commitment to enhancing shareholder value remains unwavering. In fiscal year 2023, Hawkins distributed dividends totaling $12 million and allocated $6.6 million to stock repurchases. The company has increased its quarterly dividend by 7% to 16 cents per share to reaffirm this commitment.
In the first quarter of fiscal 2024, the company exceeded expectations by reporting earnings of $1.12 per share, surpassing the Zacks Consensus Estimate of 61 cents. Impressively, it has consistently outperformed earnings projections over the past four quarters, boasting an average beat of 25.6%.
The consensus estimate for earnings for the current fiscal year has been revised upward by 32.3% in the past 60 days. The Zacks Consensus Estimate for fiscal 2024 earnings stands at $3.40 per share, reflecting an impressive 18.9% growth from the previous year's reported figure.
The consensus estimate for the second quarter of fiscal 2024 has also been revised 42.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 70.5% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 2.9%. The company’s shares have rallied 28% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 13.1% upward in the past 60 days. The company’s shares have risen roughly 59.1% in the past year.
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Hawkins (HWKN) Rallies 47% YTD: Will the Momentum Continue?
Hawkins, Inc.’s (HWKN - Free Report) shares have rallied 46.5% year to date. The rally has resulted in the stock outperforming its industry’s rise of 9% over the same time frame. The company has topped the S&P 500’s roughly 17.2% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #1 (Strong Buy) stock.
What’s Going in Hawkins’ Favor?
In the first quarter of fiscal 2024, the company delivered outstanding results, marked by a remarkable 101.8% increase in net income from the previous quarter’s levels. This remarkable performance was mirrored by a 10% revenue growth from the preceding quarter.
Notably, the Water Treatment segment demonstrated exceptional performance, showing a significant 19% year-over-year revenue growth and an impressive 70% increase in operating income. This achievement underscores the company’s strategic focus on this sector, which involves expanding its core business and effectively integrating recent acquisitions. The addition of EcoTech Enterprises in July further solidified the company’s position in the water treatment market.
The company's astute pricing strategy is one of the key drivers behind the expansion of the Water Treatment segment. In response to rising raw material costs, the company adapted its product pricing effectively, boosting sales.
While maintaining a cautious stance, the company holds an optimistic outlook for the Industrial segment. Acknowledging potential challenges related to economic pressures affecting customer demand, the company remains confident in its ability to navigate these obstacles and sustain its growth trajectory.
Moreover, the company's commitment to enhancing shareholder value remains unwavering. In fiscal year 2023, Hawkins distributed dividends totaling $12 million and allocated $6.6 million to stock repurchases. The company has increased its quarterly dividend by 7% to 16 cents per share to reaffirm this commitment.
In the first quarter of fiscal 2024, the company exceeded expectations by reporting earnings of $1.12 per share, surpassing the Zacks Consensus Estimate of 61 cents. Impressively, it has consistently outperformed earnings projections over the past four quarters, boasting an average beat of 25.6%.
The consensus estimate for earnings for the current fiscal year has been revised upward by 32.3% in the past 60 days. The Zacks Consensus Estimate for fiscal 2024 earnings stands at $3.40 per share, reflecting an impressive 18.9% growth from the previous year's reported figure.
The consensus estimate for the second quarter of fiscal 2024 has also been revised 42.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Hawkins, Inc. Price and Consensus
Hawkins, Inc. price-consensus-chart | Hawkins, Inc. Quote
Zacks Rank & Other Key Picks
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Akzo Nobel N.V. (AKZOY - Free Report) , both sporting a Zacks Rank #1, and Alamos Gold Inc. (AGI - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 70.5% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 2.9%. The company’s shares have rallied 28% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 13.1% upward in the past 60 days. The company’s shares have risen roughly 59.1% in the past year.