H.B. Fuller Company

What slowdown? The chemical sector isn't seeing one yet. H.B. Fuller Company ( FUL - Snapshot Report ) recently reported double digit revenue growth in fiscal 2011 and still expects a strong 2012. Shares of this Zacks #1 Rank (Strong Buy) have broken out in 2012, but it's still a value stock with a price-to-sales ratio under 1.0.

H.B. Fuller manufactures adhesives, sealants, paints and other specialty chemical products for customers in packaging, hygiene, paper converting, woodworking and construction in more than 100 countries.

The company is worldwide, operating in four geographic regions: North America, Latin America, Europe and Asia Pacific.

H.B. Fuller Beat by 10.2% in the Fiscal Fourth Quarter

On Jan 18, H.B. Fuller reported its fourth quarter and fiscal 2011 full year results. It blew by the Zacks Consensus by 6 cents a share for the quarter. Earnings per share were 65 cents compared to the Zacks Consensus of 59 cents.

Fiscal Q4 had 14 weeks of activity while the fourth quarter of 2010 had 13 weeks.

Revenue rose 21% to $436.5 million compared to last year, or 13% when adjusted for the extra week. The quarter was boosted by higher average selling prices, favorable foreign currency translation and higher volume.

Organic revenue increased by 18.6% compared to a year ago.

For the full year, which also had an extra week, adjusted revenue climbed 13% to $1.6 billion compared with fiscal 2010. Higher average selling price also played a role.

Outlook for 2012 Still Looks Bullish

The company is optimistic as it heads into 2012. Despite continued raw material cost escalation, it had been able to improve gross margins in 2011.

H.B. Fuller expects revenue up 4% to 7% relative to 2011, or 6% to 9% growth when adjusted for an extra week in 2011.

Earnings are expected in the range of $2.05 and $2.15. This was above the analysts' consensus at the time.

As a result, the analysts have been scrambling to raise estimates. 5 have moved higher in the last month, pushing the fiscal 2012 Zacks Consensus Estimate up to $2.09 from $2.03 per share.

That is earnings growth of 9.8%.

Shares Breakout But Is There Still Value?

For nearly 3 years, shares had been in a narrow trading despite solid earnings and revenue numbers.

But that all changed in 2012 as FUL joined in on the recent stock rally and broke out to new multi-year highs.

Despite the hot stock, there's still value in the shares.

H.B. Fuller has a forward P/E of 14.3, which, while not dirt cheap, is still below the 15x cut-off I use for value stocks.

It also has an attractive price-to-book ratio of 2.1. A P/B under 3.0 usually indicates a company has value.

And to top it all off, the price-to-sales ratio is under 1.0, at 0.95, which usually means that a company is undervalued.

The chemical companies are a good indicator of the global economy as they are the first to see the slowdown (and the first to see any turnaround.) While most investors thought the doom was in last summer, the companies surprised by keeping up the growth.

Even with the recent surge in the stock price, H.B. Fuller still has attractive valuations. An investor gets value and hopefully further earnings growth to boot.

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.