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Here's Why Harsco (HSC) is a Solid Investment Option Now
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We believe that Harsco Corporation is a solid choice for investors seeking exposure in the industrial services space.
The stock, with roughly $2-billion market capitalization, was upgraded to a Zacks Rank #1 (Strong Buy) on Aug 15. Moreover, the stock’s investment appeal is accentuated by a favorable VGM Score of A.
The company delivered better-than-expected results in the last four quarters, with an average positive earnings surprise of 17.80%.
Why the Upgrade?
We are providing a snapshot of how Harsco fared in second-quarter 2018. The company’s earnings of 36 cents per share surpassed the Zacks Consensus Estimate by 2.86%. Net sales went up 9% year over year on the back of sales growth of 5% in Metals & Minerals segment, 25% in Industrial, and 9% in Rail.
Harsco’s investments for expanding business in attractive markets, boosting innovative capabilities, creating operational efficacy and acquiring businesses will prove beneficial in the years ahead. Internal capabilities of the Metals & Minerals segment are strengthening. Further, the segment stands to gain from contracts wins, higher commodity prices, rise in steel output by customers and profitability growth in some Applied Products operations. The Industrial segment is gaining from strengthening demand while Rail segment is benefitting from higher demand for after-market parts and solid demand for equipment in North America.
For 2018, Harsco anticipates mid-single to high-single-digit sales growth in Metals & Minerals segment while predicts double-digit sales growth in Industrial and mid-single-digit sales increase in Rail segment. Based on these expectations, as well as favorable operating environment and lower corporate expenses, the company raised its adjusted operating income guidance from $165-$180 million to $175-$185 million. Adjusted earnings per share are anticipated to be roughly $1.19-$1.27 versus the previous projection of $1.11-$1.24.
In the past 30 days, the company’s earnings estimates for 2018 and 2019 have been revised upward by one brokerage firm. The Zacks Consensus Estimate now stands at $1.23 for 2018 and $1.40 for 2019, reflecting growth of 2.5% and 3.7% from the respective 30-day-ago tallies.
Moreover, the company’s price performance has been impressive. The stock has yielded a 46.6% return in the past six months, outperforming 22.8% growth recorded by the industry.
In the past 60 days, earnings estimates on these three stocks improved for the current year and the next year. Earnings surprise for the last four quarters was a positive 4.01% for Altra Industrial, 7.9% for Colfax and 101.32% for DXP Enterprises.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Here's Why Harsco (HSC) is a Solid Investment Option Now
We believe that Harsco Corporation is a solid choice for investors seeking exposure in the industrial services space.
The stock, with roughly $2-billion market capitalization, was upgraded to a Zacks Rank #1 (Strong Buy) on Aug 15. Moreover, the stock’s investment appeal is accentuated by a favorable VGM Score of A.
The company delivered better-than-expected results in the last four quarters, with an average positive earnings surprise of 17.80%.
Why the Upgrade?
We are providing a snapshot of how Harsco fared in second-quarter 2018. The company’s earnings of 36 cents per share surpassed the Zacks Consensus Estimate by 2.86%. Net sales went up 9% year over year on the back of sales growth of 5% in Metals & Minerals segment, 25% in Industrial, and 9% in Rail.
Harsco’s investments for expanding business in attractive markets, boosting innovative capabilities, creating operational efficacy and acquiring businesses will prove beneficial in the years ahead. Internal capabilities of the Metals & Minerals segment are strengthening. Further, the segment stands to gain from contracts wins, higher commodity prices, rise in steel output by customers and profitability growth in some Applied Products operations. The Industrial segment is gaining from strengthening demand while Rail segment is benefitting from higher demand for after-market parts and solid demand for equipment in North America.
For 2018, Harsco anticipates mid-single to high-single-digit sales growth in Metals & Minerals segment while predicts double-digit sales growth in Industrial and mid-single-digit sales increase in Rail segment. Based on these expectations, as well as favorable operating environment and lower corporate expenses, the company raised its adjusted operating income guidance from $165-$180 million to $175-$185 million. Adjusted earnings per share are anticipated to be roughly $1.19-$1.27 versus the previous projection of $1.11-$1.24.
In the past 30 days, the company’s earnings estimates for 2018 and 2019 have been revised upward by one brokerage firm. The Zacks Consensus Estimate now stands at $1.23 for 2018 and $1.40 for 2019, reflecting growth of 2.5% and 3.7% from the respective 30-day-ago tallies.
Harsco Corporation Price and Consensus
Harsco Corporation Price and Consensus | Harsco Corporation Quote
Moreover, the company’s price performance has been impressive. The stock has yielded a 46.6% return in the past six months, outperforming 22.8% growth recorded by the industry.
Other Stocks to Consider
Other top-ranked stocks worth considering in the Zacks Industrial Products sector are Altra Industrial Motion Corp. , Colfax Corporation and DXP Enterprises, Inc. (DXPE - Free Report) . All these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates on these three stocks improved for the current year and the next year. Earnings surprise for the last four quarters was a positive 4.01% for Altra Industrial, 7.9% for Colfax and 101.32% for DXP Enterprises.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>