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4 Reasons to Add Century Aluminum (CENX) to Your Portfolio
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Century Aluminum Company’s (CENX - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this aluminum producer an intriguing choice for investors right now.
What’s Working in Favor of CENX?
Solid Rank & VGM Score: Century Aluminum currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Century Aluminum has topped the industry it belongs to over a year. The company’s shares have rallied around 29.8% over this period, compared with roughly 4.7% gain recorded by the industry.
Strong Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Century Aluminum is currently pegged at $1.49, reflecting an expected year-over-year growth of a staggering 313.9%. Moreover, earnings are expected to register a 70.9% growth in 2019.
Growth Drivers in Place: Century Aluminum should benefit from favorable market fundamentals and demand for aluminum across key markets. According to the company, global aluminum demand rose roughly 6% year over year in the fourth quarter of 2017. Century Aluminum also saw a 7%, 4% and 2% demand growth on a year over year basis across China, Europe and North America, respectively, in the quarter.
The company, in its fourth-quarter earnings call, said that demand for primary aluminum and aluminum products remains good and it expects this environment to continue for the foreseeable future. Century Aluminum should also gain from its investments to upgrade its product mix across its plants.
Century Aluminum is also implementing a number of actions to control costs. The company benefited from cost management actions in the fourth quarter and these initiatives are expected to continue to support its bottom line in the first quarter of 2018.
Century Aluminum is also expected to continue to gain from higher London Metal Exchange (LME) prices. The company’s adjusted EBITDA improved roughly six times from $29 million in 2016 to $164 million in 2017, aided by its cost management actions and increased LME prices. Higher LME pricing and regional premiums also led to a roughly 20% year over year rise in sales in 2017. The company expects LME and regional premiums to improve EBITDA by around $10 million in first-quarter 2018.
Other top-ranked companies in the basic materials space include Kronos Worldwide, Inc. (KRO - Free Report) , Methanex Corporation (MEOH - Free Report) and Eastman Chemical Company (EMN - Free Report) .
Methanex carries a Zacks Rank #1 and has an expected long-term earnings growth rate of 15%. Its shares have gained around 29% over a year.
Eastman Chemical has an expected long-term earnings growth rate of 8.9% and carries a Zacks Rank #2. Its shares have gained around 28% over a year.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
4 Reasons to Add Century Aluminum (CENX) to Your Portfolio
Century Aluminum Company’s (CENX - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this aluminum producer an intriguing choice for investors right now.
What’s Working in Favor of CENX?
Solid Rank & VGM Score: Century Aluminum currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Century Aluminum has topped the industry it belongs to over a year. The company’s shares have rallied around 29.8% over this period, compared with roughly 4.7% gain recorded by the industry.
Strong Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Century Aluminum is currently pegged at $1.49, reflecting an expected year-over-year growth of a staggering 313.9%. Moreover, earnings are expected to register a 70.9% growth in 2019.
Growth Drivers in Place: Century Aluminum should benefit from favorable market fundamentals and demand for aluminum across key markets. According to the company, global aluminum demand rose roughly 6% year over year in the fourth quarter of 2017. Century Aluminum also saw a 7%, 4% and 2% demand growth on a year over year basis across China, Europe and North America, respectively, in the quarter.
The company, in its fourth-quarter earnings call, said that demand for primary aluminum and aluminum products remains good and it expects this environment to continue for the foreseeable future. Century Aluminum should also gain from its investments to upgrade its product mix across its plants.
Century Aluminum is also implementing a number of actions to control costs. The company benefited from cost management actions in the fourth quarter and these initiatives are expected to continue to support its bottom line in the first quarter of 2018.
Century Aluminum is also expected to continue to gain from higher London Metal Exchange (LME) prices. The company’s adjusted EBITDA improved roughly six times from $29 million in 2016 to $164 million in 2017, aided by its cost management actions and increased LME prices. Higher LME pricing and regional premiums also led to a roughly 20% year over year rise in sales in 2017. The company expects LME and regional premiums to improve EBITDA by around $10 million in first-quarter 2018.
Century Aluminum Company Price and Consensus
Century Aluminum Company Price and Consensus | Century Aluminum Company Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Kronos Worldwide, Inc. (KRO - Free Report) , Methanex Corporation (MEOH - Free Report) and Eastman Chemical Company (EMN - Free Report) .
Kronos sports a Zacks Rank #1 and has an expected long-term earnings growth rate of 5%. Its shares have rallied roughly 37% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex carries a Zacks Rank #1 and has an expected long-term earnings growth rate of 15%. Its shares have gained around 29% over a year.
Eastman Chemical has an expected long-term earnings growth rate of 8.9% and carries a Zacks Rank #2. Its shares have gained around 28% over a year.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>