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Heritage-Crystal Now a Strong Buy on Solid Q2 & Outlook

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Zacks Investment Research upgraded Heritage-Crystal Clean, Inc. to a Zacks Rank #1 (Strong Buy) on Aug 18, 2016. Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market over the next few quarters.

Why the Upgrade?

Market sentiments have been favoring Heritage-Crystal Clean, as evident from the year-to-date return of roughly 16.9%. Also, the company posted an average positive earnings surprise of 38.22% for the last four quarters. In the recently reported second-quarter 2016, the company’s earnings of 8 cents per share exceeded the Zacks Consensus Estimate of 3 cents by a whopping 166.7%.

Heritage-Crystal Clean’s Services revenues in the quarter increased 10.1% year over year, offset by 23.4% decline in Products revenues.

For 2016, Heritage-Crystal Clean anticipates that increased used oil collection charges and improved oil product pricing will likely improve results for the Oil Business segment. Also, the company aims to return to profitability in its Environmental Services Business by the fourth quarter.

Impressive financial results and future outlook have boosted investors’ optimism regarding Heritage-Crystal Clean’s prospects. Over the last 30 days, the Zacks Consensus Estimate for the stock has increased 78.9% to 34 cents per share for 2016 and 35.3% to 69 cents for 2017, while the same for third-quarter 2016 increased 62.5% to 13 cents.

HERITAGE-CRYSTL Price and Consensus

 

HERITAGE-CRYSTL Price and Consensus | HERITAGE-CRYSTL Quote

Other Stocks to Consider

Heritage-Crystal Clean currently has a market capitalization of approximately $278 million. Other stocks worth considering in the sector include H2O Innovation Inc. , Landauer Inc. and Illinois Tool Works Inc. (ITW - Free Report) . While H2O Innovation sports a Zacks Rank #1, both Landauer and Illinois Tool Works carry a Zacks Rank #2 (Buy).

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