This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
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Darling International Inc. provides rendering, recycling and recovery solutions for the food industry worldwide. The company was founded in 1993 and has a market cap of $2.1 billion.
Darling has seen some very sharp gains over the six months, more than doubling in price after reporting excellent Q1 results in early May that came in ahead of expectations.
Revenue for the period more than doubled from last year, jumping to $440 million, largely driven by the company's acquisition of Griffin Industries from December of 2010. Earnings also looked great, coming in at 43 cents, 43% ahead of the Zacks Consensus Estimates.
The company noted that in addition to the acquisition, the company also benefited from strong prices for fats, proteins and bakery products.
Darling used its strong earnings momentum and cash flows to take a big chunk out of its total debt load, falling $340 million from just last quarter to $370 million against cash and short-term investments of $38 million.
We saw some extremely bullish movement in estimates off the good quarter, with the current year jumping 33% to $1.52. The next-year estimate is pegged at $1.62, a respectable 6% growth projection.
But in spite of the recent gains, DAR still has value, trading with a forward P/E of 11.5X, a discount to its peer average of 12.3X.
On the chart, DAR had been grinding higher for the last 9 month before spiking higher into a new all-time high on the good quarter. The stochastic below the chart is signaling that shares are trading in oversold territory. Look for support from the long-term trend on any weakness. Take a look below.
This Week's Momentum Zacks Rank Buy Stocks
Fresh Del Monte Produce, Inc. (FDP) is weathering the choppy market nicely, currently trading near its 52-week high at $28.60 on a 28% Q2 earnings surprise. With the food story accelerating on growing demand and erratic weather, this Zacks #1 stock is a bountiful pick for momentum. Read Full Article.
Ancestry.com, Inc. (ACOM) has been trading strong for the last year, recently spiking into a new all-time high after reporting a 12.5% Q1 earnings surprise. With estimates on the rise and a bullish 25% growth projection, this Zacks #1 rank stock has a bullish lineage. Read Full Article.
Standard Motor Products (SMP) isn't a flashy social-networking company, but what it does have is earnings and a very compelling valuation. That and rising estimates makes this Zacks #1 stock a strong momentum player. Read Full Article.
Hill-Rom Holdings, Inc. (HRC) remains glued to its recent 52-week high after reporting another strong quarter in late April. With estimates on the upswing and a bullish growth projection, this Zacks #1 rank stock doesn't rest for momentum. Read Full Article.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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