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The specialty chemicals sector continues to be hot. TPC Group (TPCG) is trading at new 52-week highs yet the stock is still cheap with a low P/E ratio and price-to-book ratio.

Can it be both a hot growth stock and a value stock? You bet.

TPC Group manufactures chemicals for customers in the chemical and petroleum-based industries worldwide.

It is the largest producer of finished butadiene and butene-1 which are used for hydrocarbon processing. In plain english, TPC Group's products go into tires, carpets and gasoline additives, among other things.

It produces the building blocks of the manufacturing economy. In this economy, the specialty chemical companies have been among the first to see growth return and are still seeing tremendous numbers a full year after the recovery began.

Earnings Per Share Expected to Double in Fiscal 2011

There is only 1 estimate on TPC Group for fiscal 2011 but it has moved higher in just the last month.

The fiscal 2011 Zacks Consensus has jumped to $2.25 from $1.77 per share. The company made just $1.08 per share last year which is earnings growth of 108.3%.

The growth story is expected to continue with another 29% earnings per share growth in fiscal 2012.

TPC Group Crushed it in the Fiscal Fourth Quarter of 2010

On Sep 17, the company reported its fiscal fourth quarter results and easily beat the Zacks Consensus by 45%. Earnings per share were 80 cents compared to the consensus of 55 cents.

Revenue rose 104% to $531.8 million from $260.9 million in the year ago quarter due to higher average selling prices. It also saw revenue jump 30% over the preceding quarter primarily because of higher prices but also higher sales volumes.

The company has both key metrics working to its advantage- pricing power and products that are in demand.

"As we had anticipated, market conditions through the fourth quarter continued the favorable trend we have seen over the past few quarters as demand continued to strengthen and supply remained tight for most of our products," said Charlie Shaver, President and CEO.

"We again saw margin expansion that positively impacted our bottom line as selling price improvements continued to stay ahead of raw material cost increases," he added.

The company is making a 6-month transition to a new yearly calendar- going from June 30 to December 31 year end. Therefore, it will again be reporting earnings on Nov 2 in order to get on the appropriate schedule.

The Secret Combination: Value + Growth

TPC Group is trading with a forward P/E of 12.4 which is under its peers' average of 13.3x and also under the S&P 500 of 14.5x. This is also well within the parameters for a value stock, which for me is under 15.

Its price-to-book ratio is also attractive at 1.7x compared to its peers at 2.1.

But TPCG doesn't just have value. It also has growth. Earnings are expected to grow by 33% over the next 5 years.

Its growth plus value component is obvious in its PEG ratio, which is very attractive at just 0.4. Its peers are also juicy with a PEG of only 0.7.

TPC Group is a Zacks #1 Rank (strong buy) stock.

Check out the 5-year chart below.

It is fast approaching its 5-year high hit during the 2008 commodities boom.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

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