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Why You Should Add Ingevity (NGVT) Stock to Your Portfolio
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Ingevity Corporation’s (NGVT - Free Report) stock looks promising at the moment. It is benefiting from its cost-saving actions, the acquisition of the Capa caprolactone business and growth in its applications driven by regulations and technology adoption.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Price Performance
Shares of Ingevity have rallied 41.1% over the past six months against the 16.6% decline of its industry. It has also outperformed the S&P 500’s 26.7% rise over the same period.
Estimates Northbound
Earnings estimate revisions have the greatest impact on stock prices. Over the past month, the Zacks Consensus Estimate for Ingevity for the current year has increased around 18.2%. The consensus estimate for 2021 has also been revised 1% upward over the same time frame.
Positive Earnings Surprise History
Ingevity has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 32%, on average.
Attractive Valuation
Valuation looks attractive as Ingevity’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Ingevity is currently trading at trailing 12-month EV/EBITDA multiple of 10.35, cheaper compared with the industry average of 29.35.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Ingevity is 35.7%, above the industry’s level of 10.4%.
Growth Drivers in Place
Ingevity is gaining from growth in its applications driven by regulations and technology adoption, its cost-management actions and the acquisition of the Capa caprolactone business.
The company is benefiting from higher sales in China as automakers in the country have completed the implementation of the China 6 standard. It saw higher demand in China in the third quarter of 2020 on the back of the China 6 implementation.
Moreover, Ingevity is seeing strong sales for its pavement technologies and achieved record sales in the third quarter on strength across China and EMEA. It is witnessing continued adoption of the Evotherm warm-mix technology.
The company is also taking certain cost-reduction measures in the wake of the coronavirus pandemic to boost profitability. These actions include reduction of headcount through an early retirement program, streamlining of manufacturing processes and reduction of traveling expenses and plant spending. Ingevity saw benefits of its cost initiatives in the third quarter.
Ingevity is also benefiting from the acquisition of the Capa caprolactone business. Capa has a strong and market-leading business that focuses on high-growth end-use applications. The buyout enabled Ingevity with a new technology platform to drive revenue and earnings growth.
Other top-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Pretium Resources Inc. .
Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 19% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 52% in the past year. It currently carries a Zacks Rank #1.
Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 26% in the past year. It currently carries a Zacks Rank #2.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Why You Should Add Ingevity (NGVT) Stock to Your Portfolio
Ingevity Corporation’s (NGVT - Free Report) stock looks promising at the moment. It is benefiting from its cost-saving actions, the acquisition of the Capa caprolactone business and growth in its applications driven by regulations and technology adoption.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Price Performance
Shares of Ingevity have rallied 41.1% over the past six months against the 16.6% decline of its industry. It has also outperformed the S&P 500’s 26.7% rise over the same period.
Estimates Northbound
Earnings estimate revisions have the greatest impact on stock prices. Over the past month, the Zacks Consensus Estimate for Ingevity for the current year has increased around 18.2%. The consensus estimate for 2021 has also been revised 1% upward over the same time frame.
Positive Earnings Surprise History
Ingevity has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 32%, on average.
Attractive Valuation
Valuation looks attractive as Ingevity’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Ingevity is currently trading at trailing 12-month EV/EBITDA multiple of 10.35, cheaper compared with the industry average of 29.35.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Ingevity is 35.7%, above the industry’s level of 10.4%.
Growth Drivers in Place
Ingevity is gaining from growth in its applications driven by regulations and technology adoption, its cost-management actions and the acquisition of the Capa caprolactone business.
The company is benefiting from higher sales in China as automakers in the country have completed the implementation of the China 6 standard. It saw higher demand in China in the third quarter of 2020 on the back of the China 6 implementation.
Moreover, Ingevity is seeing strong sales for its pavement technologies and achieved record sales in the third quarter on strength across China and EMEA. It is witnessing continued adoption of the Evotherm warm-mix technology.
The company is also taking certain cost-reduction measures in the wake of the coronavirus pandemic to boost profitability. These actions include reduction of headcount through an early retirement program, streamlining of manufacturing processes and reduction of traveling expenses and plant spending. Ingevity saw benefits of its cost initiatives in the third quarter.
Ingevity is also benefiting from the acquisition of the Capa caprolactone business. Capa has a strong and market-leading business that focuses on high-growth end-use applications. The buyout enabled Ingevity with a new technology platform to drive revenue and earnings growth.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Pretium Resources Inc. .
Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 19% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 52% in the past year. It currently carries a Zacks Rank #1.
Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 26% in the past year. It currently carries a Zacks Rank #2.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>