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KMG Chemicals Upgraded to Strong Buy on Bright Prospects
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On Mar 15, Zacks Investment Research upgraded KMG Chemicals, Inc. to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
In the last one month, KMG Chemicals’ shares yielded a return of 19.08%, outperforming the gain of 0.26% recorded by the Zacks categorized Chemicals Specialty industry.
Why the Upgrade?
Market sentiments have been favoring KMG Chemicals for quite some time now, especially after the company reported better-than-expected results in first half of fiscal 2017. Earnings surprise was a positive 6.67% in the first quarter while in the recently reported second-quarter earnings of 57 cents per share surpassed the Zacks Consensus Estimate by 35.71%.
Anticipating continued growth in the second half of fiscal 2017, KMG Chemicals has raised its fiscal 2017 earnings before interest, tax, depreciation and amortization (EBITDA) forecast to $51−$53 million from the earlier prediction of $47−$49 million. Also, sales are now predicted within $315−$320 million, up from $300−$305 million.
In sync with its growth policies, KMG Chemicals acquired Sealweld, a premier supplier of high-performance products and services to global pipeline operators, in Jan 2017.The acquired assets will strengthen the company’s industrial lubricants business as well as prove to be immediately accretive to adjusted EBITDA and adjusted earnings per share. Also, the company believes in rewarding its shareholders handsomely through dividend payments.
Investors seem to be optimistic about KMG Chemicals’ future prospects, as evident from year-over-year earnings growth of 13.04% for fiscal 2017 and 10.44% for fiscal 2018.
KMG Chemicals has a market capitalization of $520.2 million. Other stocks worth considering in the chemical specialty industry include Valvoline Inc. (VVV - Free Report) , Versum Materials, Inc. and BioAmber Inc. (BIOA - Free Report) . While both Valvoline and Versum Materials sport a Zacks Rank #1, BioAmber Inc. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Valvoline Inc. reported better-than-expected results in the last quarter, with a positive earnings surprise of 16.67%. Also, bottom-line expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.
Versum Materials, Inc.’s earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward, over the last 60 days. Also, results were better-than-expected with an earnings surprise of 17.50%, in the last quarter.
BioAmber Inc. has witnessed positive revisions in bottom-line estimates for 2017, over the past 60 days.
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KMG Chemicals Upgraded to Strong Buy on Bright Prospects
On Mar 15, Zacks Investment Research upgraded KMG Chemicals, Inc. to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.
In the last one month, KMG Chemicals’ shares yielded a return of 19.08%, outperforming the gain of 0.26% recorded by the Zacks categorized Chemicals Specialty industry.
Why the Upgrade?
Market sentiments have been favoring KMG Chemicals for quite some time now, especially after the company reported better-than-expected results in first half of fiscal 2017. Earnings surprise was a positive 6.67% in the first quarter while in the recently reported second-quarter earnings of 57 cents per share surpassed the Zacks Consensus Estimate by 35.71%.
Anticipating continued growth in the second half of fiscal 2017, KMG Chemicals has raised its fiscal 2017 earnings before interest, tax, depreciation and amortization (EBITDA) forecast to $51−$53 million from the earlier prediction of $47−$49 million. Also, sales are now predicted within $315−$320 million, up from $300−$305 million.
In sync with its growth policies, KMG Chemicals acquired Sealweld, a premier supplier of high-performance products and services to global pipeline operators, in Jan 2017.The acquired assets will strengthen the company’s industrial lubricants business as well as prove to be immediately accretive to adjusted EBITDA and adjusted earnings per share. Also, the company believes in rewarding its shareholders handsomely through dividend payments.
Investors seem to be optimistic about KMG Chemicals’ future prospects, as evident from year-over-year earnings growth of 13.04% for fiscal 2017 and 10.44% for fiscal 2018.
KMG Chemicals, Inc. Price and Consensus
KMG Chemicals, Inc. Price and Consensus | KMG Chemicals, Inc. Quote
Other Stocks to Consider
KMG Chemicals has a market capitalization of $520.2 million. Other stocks worth considering in the chemical specialty industry include Valvoline Inc. (VVV - Free Report) , Versum Materials, Inc. and BioAmber Inc. (BIOA - Free Report) . While both Valvoline and Versum Materials sport a Zacks Rank #1, BioAmber Inc. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Valvoline Inc. reported better-than-expected results in the last quarter, with a positive earnings surprise of 16.67%. Also, bottom-line expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.
Versum Materials, Inc.’s earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward, over the last 60 days. Also, results were better-than-expected with an earnings surprise of 17.50%, in the last quarter.
BioAmber Inc. has witnessed positive revisions in bottom-line estimates for 2017, over the past 60 days.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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