Neenah Paper, Inc. (NP) has seen big gains over the last year, currently lingering directly below its recent 52-week high at $23.75. With an average earnings surprise of 31% over the last four quarters and estimates on the rise, this Zacks #1 stock is a solid pick for growth.
Neenah Paper, Inc., together with its subsidiaries, produces and sells fine papers and various technical paper products worldwide. The company was founded in 2004 and has a market cap of $324 million.
As a small capper with a strong earnings growth, NP has seen big gains over the last year, with shares more than doubling from $10 to $23. That strong growth was on display in early May when the company reported another strong quarter that came in ahead of expectations.
Revenue for the period was up 3% from last year to $173 million. Earnings also came in strong at 54 cents, 29% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 31% over the last four quarters.
Neenah's larger segment, Technical Products, saw a solid 8% increase in sales to $105 million while sales in Fine Paper fell 3% to $67 million.
The company has also been focused on strengthening its balance sheet, with total debt falling $32 million from last year to $215 million.
We saw some pretty solid movement in estimates off the good quarter, with the current year adding 20 cents to $1.85. The next-year estimate is pegged at $2.08, a solid 12% growth projection.
But in spite of recent gains, the valuation picture still looks solid, with a PEG ratio of .96, safely below the benchmark for value of 1.
On the chart, NP continues to linger below its recent 52-week high after rebounding from a trend line in the strong market. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.