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Huntsman Corporation (HUN - Snapshot Report) is trading at just 5.2x forward estimates even though earnings are expected to grow in the triple digits in 2011. Shares of this Zacks #2 Rank (buy) plunged over the summer as investors abandoned the stock. Is it too late in the cycle to buy the chemical companies?

Huntsman manufactures a variety of chemicals for the global market, including the plastics, automotive, aviation, textile, paint and coatings, technology, agriculture, furniture and health care industries.

Strongest Third Quarter in History

On Nov 2, Huntsman reported its third quarter results and surprised on the Zacks Consensus by 4.7%. Earnings were 45 cents compared to the consensus of 43 cents. The company made 34 cents in the third quarter of 2010.

Revenue jumped 24% to $3 billion from $2.4 billion a year ago.

All divisions saw an increase in revenue except for Textile Effects which saw a decrease due to lower sales volumes which were only partially offset by higher average selling prices. There was lower demand. The average selling prices increased due to the strength of the Swiss Franc against the U.S. dollar.

The company also announced earlier in the third quarter that it would record a cash restructuring charge of about $135 million to deal with a restructuring plan to mitigate the impact of the strong Swiss Franc and the challenging business conditions of the global textile industry.

Record Year Expected in 2011

As of early November, Huntsman still expected to post a record 2011 despite "sluggish" global business conditions.

But, it also expected to see stronger earnings in the coming year as many of its larger product lines are apparently still far removed from peak earnings potential.

Double Digit Earnings Growth in 2012?

After triple digit earnings growth in 2010 and another 104% expected in 2011, Huntsman is expected to slow in 2012.

The 2012 Zacks Consensus has actually fallen to $1.91 from $1.96 over the last 90 days as 3 estimates moved lower in the prior month. Still, this is earnings growth of 13% as the Zacks Consensus is calling for $1.70 in 2011.

Super Cheap Stock

Investors have fled the stock since the summer downturn.

Huntsman now has very attractive valuations. In addition to a forward P/E of just 5.2, the company has a price-to-book of 1.2. A P/B ratio under 3.0 usually indicates value.

It also has a price-to-sales ratio of just 0.2. A P/S ratio under 1.0 can mean a company is undervalued.

If an investor is also looking for income, in addition to value, Huntsman rewards its shareholders with a dividend currently yielding a juicy 4%.

In the third quarter earnings report Huntsman sounded upbeat about 2012. It is scheduled to report fourth quarter results on Feb 16. We'll soon find out whether or not chemical companies have reached peak earnings in this cycle or if the global economy is stronger than many realize.

This Week's Value Zacks Rank Buy Stocks

The steel companies are navigating a difficult market as consumer demand appears to be solid but prices are declining. Reliance Steel & Aluminum Company (RS) is still expected to post double digit earnings growth in both 2011 and 2012. This Zacks #1 Rank (strong buy) is also a value stock with a forward P/E of 10.9. Read the full article.

Not all banks are created equal. Oriental Financial Group Inc. (OFG) recently raised its dividend by 20% due to an improving outlook for its Puerto Rico-based business. This Zacks #1 Rank (strong buy) also has attractive valuations with a forward P/E of just 8.4. Read the full article.

The transports have momentum to start 2012. Trinity Industries, Inc. (TRN) is expected to grow earnings by the double digits as the backlog grew on its railcar and barge businesses. This Zacks #1 Rank (strong buy) is a double threat in both growth and value as it has a P/B ratio of just 1.3. Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.

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