Back to top

Image: Bigstock

Ingevity (NGVT) Hits New 52-Week High: What's Driving It?

Read MoreHide Full Article

Shares of Ingevity Corporation (NGVT - Free Report) scaled a new 52-week high of $102.04 on Sep 7, before closing at $99.32.

The company has a market cap of roughly $4.2 billion. Average volume of shares traded in the last three months was around 227.9K. The company has expected long-term earnings per share (EPS) growth rate of 12%.

The stock has rallied 25.3% in the past six months compared with the industry’s 2.8% rise.

 



 

Driving Factors

Buoyant outlook and upbeat prospects from the Georgia-Pacific’s pine chemicals business buyout are contributing to the rally in Ingevity’s shares.

In second-quarter earnings call, the company stated that it is optimistic about 2018, courtesy of benefits from improving market conditions for basic materials and high-value added technologies. Ingevity raised the mid-point and narrowed the range of 2018 guidance for adjusted EBITDA to $302-$314 million from $293-$307 million. The company projects sales between $1.10 billion and $1.13 billion for 2018.

The company is expected to gain from its strategy of pursuing value-creating acquisitions. Earlier this year, Ingevity closed the acquisition of Georgia-Pacific’s pine chemicals business for $310 million. The buyout boosted sales growth in the Performance Chemicals segment in the recently reported quarter. The acquisition is expected to create net synergies of roughly $11 million through manufacturing optimization, lower logistics costs and leveraged procurement costs.

Moreover, higher adoption of tall oil fatty acid (TOFA)-based products is driving results in the Performance Chemicals division. Healthy TOFA pricing had positive impact on the margins of the division during first-half 2018. Also, the company expects high margin application areas to continue gaining strength.

Ingevity Corporation Price and Consensus

 

Ingevity Corporation Price and Consensus | Ingevity Corporation Quote

 

Zacks Rank & Other Stocks to Consider

Ingevity currently sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , Celanese Corporation (CE - Free Report) and Huntsman Corporation (HUN - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien has an expected long-term earnings growth rate of 14%. Its shares have moved up 19.8% in the past year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 17.1% in the past year.

Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 5.8% in a year.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Published in