TPC Group, Inc.
by Michael VodickaJanuary 26, 2011 | Comments : 0 Recommended this article: (0)
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TPC Group, Inc. produces specialized lines of chemical products to chemical and petroleum companies worldwide. The company was founded in 1943 and has a market cap of $574 million.
Our last update on TPC Group came in early November when the company reported strong Q3 results that handily beat expectations.
Revenue for the period was up 47% from last year to $499 million. Earnings also came in strong at 70 cents, 19% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 36% over the last four quarters.
The strong quarter was driven by a combination of higher selling prices, up 44% from last year, and slightly higher volume, up 2% from last year.
Looking forward, the company noted that it will see a small seasonal slow down in the new year, but the general trend of increasing demand should remain in tact and enable it to deliver strong Q2 results.
TPC Group will also benefit from a strong financial profile, with cash and equivalents of $34 million against $269 million in debt. Its long-term debt-to-capital ratio of 45% is well below the industry average of 87%.
We have seen some movement in estimates over the last month, with the current year up 9 cents to $2.23 and the next-year estimate up 17 cents to $3.00, a bullish 35% growth projection.
But in spite of the gains, TPCG still has value, trading with a forward P/E of 14X, a nice discount to the industry average of 15.5X.
On the chart, shares recently hit a new all-time high at $33.02 after rallying for most of the last few months on strong results and a bullish market. Look for support from the long-term trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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