Back to top

Value

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Specialty chemical companies are bullish about 2011 as global demand continues to recover. Cabot Corporation (CBT - Snapshot Report) is growing its emerging markets business to tap into that demand. Cabot is a value stock, trading with a forward P/E of 14.

Cabot Corporation manufactures performance materials including rubber and specialty grade carbon blacks, inkjet colorants, fumed metal oxides, and cesium formate drilling fluids.

The company is truly global, operating 39 manufacturing facilities in 19 countries.

Cabot Beat By 73% in the Fiscal First Quarter

On Jan 25, Cabot reported its fiscal first quarter 2011 results and surprised on the Zacks Consensus Estimate by 49 cents. Earnings per share were $1.16 compared to the consensus at 67 cents. The company made just 65 cents in the year ago quarter.

Net sales rose 11% to $753 million from $679 million last year boosted by all business segments as the global economy improved.

Cabot saw robust end market growth in China and Southeast Asia. The market for tantalum products was also very strong.

Global volumes, however, while modestly higher year over year, were still below peak levels.

Zacks Consensus Estimates Rise

Given the beat and the bullish outlook from Cabot, it's not surprising that the Zacks Consensus Estimates for both fiscal 2011 and fiscal 2012 have risen.

The fiscal 2011 Zacks Consensus Estimate has moved higher by 3 cents to $3.13 per share in the last 7 days as 2 estimates were revised higher. This is earnings growth of just 3%.

But fiscal 2012 is expected to see 8% earnings growth on earnings of $3.39 per share, up from $3.21 just 30 days ago.

Cabot Has Value Characteristics

In addition to its low P/E ratio, Cabot also has a very attractive price-to-book ratio of just 1.9, well under the value parameter of 3.0.

It also has a value price-to-sales ratio of 0.9.

Cabot also has other solid fundamentals including a return on equity (ROE) of 16.9%. It pays a dividend currently yielding 1.6%.

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

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.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BOFL HOLDING BOFI 85.03 +4.64%
DIXIE GROUP DXYN 15.24 +3.81%
RAMBUS INC RMBS 12.20 +3.48%
DAIMLER AG DDAIF 93.31 +3.26%
CELL THERAPE CTIC 3.08 +3.01%