The Chemours Company’s (CC - Free Report) stock looks promising at the moment. The company has seen its shares shoot up around 116% year to date. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical company an attractive investment option.
What Makes Chemours an Attractive Pick?
Solid Rank & VGM Score: Chemours currently has a Zacks Rank #1 (Strong Buy) and a Value Growth Momentum Score (VGM Score) of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Estimates Northbound: Annual estimates for Chemours have moved north over the past three months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has increased by around 8.4% to $3.63 per share. The Zacks Consensus Estimate for 2018 has also moved up 25% over the same timeframe to $5.00.
Above the Industry: Chemours has significantly outperformed the industry it belongs to over a year. The company’s shares have jumped a whopping 258.8% over this period, compared with roughly 16.7% gain recorded by the industry.
Solid Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 for Chemours is currently pegged at $3.63, reflecting an expected year-over-year growth of a staggering 255.4%. Moreover, earnings are expected to register a 37.9% growth in 2018. The stock also has a long-term (three to five years) expected expected earnings per share growth rate of 15.5%, higher than the industry average of 9.6%.
Superior Return on Equity (ROE): Chemours’ ROE of 123%, as compared with the industry average of 22.9%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook: Chemours raised its outlook for full-year 2017 on the back of strong second-quarter results, reported earlier this month. The company now sees its adjusted EBITDA for 2017 to be in a band of $1.3 billion to $1.4 billion compared with its earlier view of $1.15 billion to $1.25 billion. The revised guidance takes into account the gains from Chemours’ transformation plan initiatives, reduced transformation-related costs in the second half and strength across the company’s major end markets. This is expected to lead to higher adjusted EBITDA margin in the second half.
Chemours should benefit from strength across its portfolio and improving end market conditions through the remainder of 2017. It should also gain from its sustained efforts to reduce costs, improve cash generation and strengthen its balance sheet. Moreover, the company should continue to benefit from increased customer adoption of both Ti-Pure titanium dioxide and Opteon refrigerants.
Other Stocks to Consider
Other well-placed stocks in the basic materials space include BASF SE (BASFY - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) . All three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF has expected long-term earnings growth rate of 8.6%.
Kronos Worldwide has expected long-term earnings growth rate of 5%.
Akzo Nobel has expected long-term earnings growth rate of 11.1%.
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