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Omega Protein Corp.

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Omega Protein Corp has been red-hot since its earnings release last week. Estimates are moving higher, keeping valuations attractive.

This Zack #1 Rank (Strong Buy) is set for another great year and should see double-digit growth for the next couple of years.

Company Description

Omega Protein makes fish oils with Omega-3 fatty acids for health-conscious humans, as well as specialty fish meal for aquaculture and livestock.

Net Income Tripled

On Mar 3 Omega Protein reported excellent full-year financial results for 2010 that included net income of $18.3 million, or $0.97 per share. That is up from just $6.2 million, $0.33 per share, in 2009. EPS for Q4 came in at $0.44, up from an 8-cent loss a year ago.

Omega Protein's Gulf of Mexico output was off due to the oil spill last year, but a strong Atlantic coast season helped offset the losses.

In the press release, the company's CEO said the company plans to use its $20 million in cash to explore acquisition opportunities.

Estimate Rising

There is currently only one analyst polled by Zacks, but they are increasingly optimistic. The full-year projection for 2011 is up 8 cents, to $1.12. Next year's forecast is up a penny to $1.29.

If Omega Protein can hit that analyst's targets the annual growth rates will be 15% and 16%, respectively.

A Solid Value as Well

Shares of OME are trading with a forward P/E of just under 11 times the 2011 estimate. The PEG ratio is at 1.1, not too bad. Omega Protein's price to sales is at 1.35 times and the price to book comes in at 1.44.

There are not many similar companies out there so a peer group comparison is tough, but these valuations are enough to justify getting in, even after shares have gone much higher.

The Chart

OME has been absolutely on fire, but given the positive earnings momentum that should continue. The stock is a Zacks #1 Rank (Strong Buy), has plenty of momentum and is coming off of a great year.

Omega Protein Corp  - ticker OME>


Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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