Top Performer for Tues: China Green Agriculture (CGA)

Most of the people in China live a rural lifestyle, so fertilizer company China Green Agriculture, Inc. (CGA - Snapshot Report) has a sweet spot in this emerging market with a growing population.

Today, it is a Zacks #1 Rank Top Performer with shares that are hovering around a 10% gain. Volume, too, has jumped on Tuesday as more than 1.8 million shares have moved so far, compared to the daily average of 1.07 million.

China Green Agriculture produces and distributes humic acid-based compound fertilizer through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product co. Ltd. ("Jinong").

On Nov 25, the company announced the completion of a registered direct offering valued at $20 million.

Estimates Growing for China Green Agriculture

There are only 2 analysts covering the company for both this fiscal year and next, but they have been quite active in the past month.

The Zacks Consensus Estimate for this fiscal year, ending June 2010, is at 91 cents per share, marking a 7% gain in 30 days from 85 cents. Both of the analysts revised higher to bring about this guidance.

Meanwhile, the Zacks Consensus Estimate for next fiscal year is at $1.36 per share, which suggests year-over-year profit growth of around 50%. The outlook for the year, which ends on June 2011, is up 2.3% in a month due to 1 analyst revision.

Fiscal First Quarter

China Green Agriculture earned 24 cents per share in its fiscal first quarter, which was ahead of the Zacks Consensus Estimate by 20%. It also surpassed the year-ago performance of 19 cents.

This was the company's fourth straight quarter of better-than-expected EPS. It has now put together an average of 26% in those quarters.

Net sales advanced 27% year over year to $11.3 million, compared to $8.9 million. Jinong accounted for 90% of those sales.

China Green Agriculture attributed the quarter's results to its new production line and sales of more high-end products, especially its highly-concentrated powdered fertilizer products.

Meanwhile, for the current quarter, CGA expects revenues between $10.4 million and $11 million with EPS of 18 cents to 20 cents. That EPS guidance is right in-line with the Zacks Consensus Estimate of 19 cents.

"We will continue to capitalize on the market opportunities within China's highly fragmented organic fertilizer industry supported by our expanded production capacity and our designated R&D platform," said China Green Agriculture Chairman/President/CEO Tao Li.

"We feel our recent initiatives will provide sustainable growth which will give us the capability to reach full utilization of our 55,000 metric ton capacity over the next three years while further gaining market share in China's green fertilizer market," said Mr. Li.

Read the full analyst report on CGA