(CHMT - Snapshot Report
is a Zacks #1 Rank (Strong Buy) after posting four upside
surprises and gets higher estimates for 2012. Its low multiples
make it worth a look for value investors.
Chemtura Corporation, manufactures specialty chemical solutions
and consumer products. The company's Consumer Products segment
provides recreational water purification products, such as
sanitizers, algaecides, biocides, oxidizers, pH balancers, mineral
balancers, and other specialty chemicals and accessories.
Four Straight Beats
CHMT has racked up four straight positive earnings surprises.
Starting in the March 2011 quarter with a $0.04 beat, the company
continued to beat the lone estimate in the following quarter.
Another analyst picked up coverage in the September 2011 quarter
giving a little more meaning to the Zacks Consensus Estimate.
That didn't make much difference when the company reported
earnings as they beat by a penny.
CHMT Recently Reported Earnings
On February 27, 2012 the company reported revenue of $677 million
slightly below estimates and nearly equivalent to the year ago
addition, earnings per
share came in at $0.26 up from $0.01 posted a year ago and $0.15
ahead of the Zacks Consensus Estimate. As a result, the stock
moved higher by more than 8%.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up
their earnings estimates for 2012. The Zacks Consensus Estimate
for 2012 EPS moved from $1.00 in January 2012 to the current
level of $1.31.
CHMT hit our value screen due to its relatively low PE and price
to book. The trailing (13.5x) and forward (11.5x) PE carry a
slight premium to the industry averages of 11.4x and 10.2x,
respectively. There is a sizeable discount in the price to book
multiple for CHMT when compared to the industry average. A 1.4x
multiple for price to book is just what value investors look for,
especially when the industry average is 2.1x.
A quick look at the chart shows that the stock has participated in
the most recent rally. Moving from just under $11 at the
beginning of the year to as much as $16 of late. Value investors
may shy away from a stock that has moved that much over just a few
months, but the valuation metrics make the stock attractive no
matter what the recent movement has been. CHMT is a Zacks #1 Rank
Aggressive Growth Link
Back on December 30, 2011 CHMT was the subject of an aggressive
growth Rank Buy article at Zacks. Since that time the stock has
appreciated by approximately 35%.
Chemura: Aggressive Growth Stock Dec 30, 2011
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor