CHICAGO, April 20, 2011 /PRNewswire/ -- Today, Zacks
Investment Ideas feature highlights Features: Kronos Worldwide
Inc. (NYSE: KRO), PPG Industries (NYSE: PPG), Olin
Corp (NYSE: OLN) and Huntsman (NYSE: HUN).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
4 Under-the-Radar Stocks Set to Soar
While metals and ag may grab all the headlines, one major sector
component that often gets overshadowed is the chemicals
industry.
The chemicals industry is an integral part of the global
economy, converting raw materials into more than 70,000 different
products. Just like metals and agriculture, chemicals have
benefited from surging global demand, which has led to rising
prices and record profits.
There are several chemical stocks with enormous growth
projections and reasonable valuations.
Here are 4 set to soar in 2011:
Kronos Worldwide Inc. (NYSE: KRO) manufactures titanium
oxide pigments. TiO2 is a fine white powder used in products like
paints, plastics and paper to give them maximum whiteness and
opacity.
The company reported excellent fourth quarter results in March.
Revenue jumped 24% year-over-year to $373.3
million on higher prices and volumes in all markets for
TiO2. EPS came in at 66 cents,
3 cents ahead of the Zacks Consensus
Estimate. This was up from 11 cents
in the same quarter in 2009.
Estimates have been soaring off the strong quarter, sending the
stock to a Zacks #1 Rank (Strong Buy). The Zacks Consensus Estimate
for 2011 is $4.37, up from
$3.48 sixty days ago. This represents
131% growth over 2010 EPS.
Despite the remarkable growth prospects, shares trade at just
13.3x forward earnings, a discount to the industry average of
14.8x. Its PEG ratio is an attractive 0.7.
PPG Industries (NYSE: PPG) is the world's leading
coatings and specialty products company. It provides products for
the construction, consumer products, industrial and transportation
markets and aftermarkets. The company was founded in 1883 and is
headquartered in Pittsburgh.
Estimates have been steadily rising as the company has delivered
an impressive 11 consecutive positive earnings surprises. The Zacks
Consensus Estimate for 2011 is currently $6.35, representing 22% EPS growth over 2010.
Valuation is reasonable with shares trading at 14.6x forward
earnings, a slight discount to the industry average. The company
also pays a dividend that yields 2.4%. It has paid a remarkable 450
consecutive dividend payments dating back to 1899.
It reports its results for the first quarter on April 21. PPG is a Zacks #1 Rank (Strong Buy)
stock.
Olin Corp (NYSE: OLN) operates in two business segments:
Chlor Alkali and Winchester.
The Chlor Alkali division manufactures chlorine and caustic
soda, sodium hydrosulfite, hydrochloric acid, hydrogen, potassium
hydroxide and bleach products. The Winchester division, which
accounts for about one-third of total revenue, makes
ammunition.
Estimates have been soaring since the company reported Q4 EPS of
45 cents, crushing the Zacks
Consensus Estimate of 5 cents. Olin's
results were driven by better than expected volumes and pricing in
both segments.
Although shares jumped on the Q4 earnings beat, valuation is
still attractive for this Zacks #1 Rank (Strong Buy) stock. Shares
trade at 14.7x forward earnings, in-line with its peers, but its
PEG ratio is only 0.67.
Like PPG, Olin Corp has been around since the 19th century. It
was founded in 1892 and is based in Clayton, Missouri. The company has paid 337
consecutive quarterly dividends. It yields 3.2%.
Huntsman (NYSE: HUN) manufactures differentiated
chemicals for a myriad of industries around the globe.
Approximately 39% of revenues come from polyurethanes.
The company has strung together three consecutive positive
earnings surprises, including a 26% beat in the fourth quarter of
2010. Revenues for the quarter jumped 17% year-over-year as each
segment saw higher average selling prices and most saw volume
increases.
Estimates have been rising off the strong quarter, sending the
stock to a Zacks #1 Rank (Strong Buy). The 2011 Zacks Consensus
Estimate is $1.41, representing 69%
growth over 2010 EPS.
The 2012 consensus estimate has also been rising. It currently
stands at $1.79, corresponding to 27%
EPS growth.
Shares trade at just 13.6x forward earnings, a discount to the
industry average of 14.8x. It pays a dividend that yields 2.0%.
Conclusion
When you come across headlines touting soaring metal and
agriculture prices, remember that the chemicals industry is booming
too. These 4 stocks all have rising estimates, attractive
valuations and are expected to see exceptional earnings growth in
2011.
Keep in mind, however, that the industry is heavily dependent on
global economic conditions, and a downturn in economic activity
would send these stocks plummeting.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc.,
which was formed in 1978 by Len
Zacks. The company continually processes stock reports
issued by 3,000 analysts from 150 brokerage firms. It
monitors more than 200,000 earnings estimates, looking for
changes.
Then when changes are discovered, they're applied to help assign
more than 4,400 stocks into five Zacks Rank categories: #1
Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This
proprietary stock picking system; the Zacks Rank, continues to
outperform the market by nearly a 3 to 1 margin. The best way
to unlock the profitable stock recommendations and market insights
of Zacks Investment Research is through our free daily email
newsletter Profit from the Pros. In short, it's your steady
flow of profitable ideas GUARANTEED to be worth your time.
Get your free subscription to Profit from the Pros
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook:
http://www.facebook.com/ZacksInvestmentResearch
YouTube Channel:
http://www.youtube.com/user/ZacksInvestmentNews
Zacks Investment Research is under common control with
affiliated entities (including a broker-dealer and an investment
adviser), which may engage in transactions involving the foregoing
securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
making any investments. Nothing herein should be construed as an
offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
http://www.zacks.com
800-767-3771 ext. 9339
support@zacks.com
SOURCE Zacks Investment Research, Inc.