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Ingevity (NGVT) Stock Up 15% in 3 Months: What's Driving It?

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Shares of Ingevity Corporation (NGVT - Free Report) have gained 15.3% over the past three months. The company has also topped its industry’s rise of roughly 14.6% over the same time frame.

Ingevity, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $2.8 billion and average volume of shares traded in the last three months was around 262.1K.


 

Let’s take a look into the factors that are driving this specialty chemicals and materials maker.

What's Aiding NGVT?

Better-than-expected earnings performance in the third quarter and upbeat prospects have contributed to the gain in the company’s shares. Ingevity’s adjusted earnings of $1.79 per share trounced the Zacks Consensus Estimate of 98 cents. Sales of $331.7 million also surpassed the Zacks Consensus Estimate of $310.8 million. The company gained from a strong recovery in the automotive market in the United States and Canada and continued strong demand in China.

Ingevity 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.

The company is 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. The company’s cost actions are expected to support margins in 2020.

Moreover, Ingevity 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 on the back of the China 6 implementation.

Ingevity is also witnessing 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 acquisition of the Capa caprolactone business has also enabled Ingevity with a new technology platform to drive revenue and earnings growth. Capa has a strong and market-leading business that focuses on high-growth end-use applications.

Stocks to Consider

Some other top-ranked stocks worth considering in the basic materials space include BHP Group (BHP - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) and Pretium Resources Inc. (PVG - Free Report) .

BHP Group has a projected earnings growth rate of 32.4% for the current fiscal year. The company’s shares have gained around 20% in a year. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 15% in the past year. It currently carries a Zacks Rank #2.

Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 9% in the past year. It currently carries a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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