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Momentum

Michael Vodicka

Darling International, Inc.

DAR

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Darling International, Inc. (DAR - Snapshot Report) has seen huge gains over the last year, more than doubling in price after recently hitting a new 52-week high on another solid earnings surprise. With estimates moving higher on the news, this Zacks #1 rank stock is a solid pick for momentum.

Company Description

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 $1.89 billion.

Although DAR has pulled back a bit with the market over the last few weeks, the longer-term trend is still very bullish. Those gains are being supported by strong sales and earnings growth, on display in early August with strong Q2 results that came in ahead of expectations.

Second-Quarter Results

Revenue for the period was up 284% from last year to $471 million. Earnings also came in strong at 44 cents, 2% ahead of the Zacks Consensus Estimate.

The big gain in sales was driven by Darling's acquisition of Griffin Industry's and higher selling prices.

Estimates

We saw some pretty solid movement in estimates on the good quarter, with the current year adding 6 cents in the last month to $1.66. The next-year estimate gained 13 cents in the same time to $1.79, a solid 8% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, with a PEG ratio of 1.13 only marginally higher than the benchmark of 1 for value.

12-Month Chart

On the chart, DAR recently pulled back a bit with the market, but the long-term trend is still bullish. 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.

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