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Here's Why Innospec (IOSP) Should Be in Your Portfolio Now

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Innospec Inc.’s (IOSP - Free Report) stock looks promising at the moment. With strong fundamentals and solid growth opportunities, this Zacks Rank #2 (Buy) stock can be a solid bet now.

Let’s delve deeper into the factors that make this chemical company an attractive investment option.

What's Working in Favor of Innospec?

An Outperformer: Innospec has outperformed the industry it belongs to over the past month. The company’s shares have gained 10.4% compared with roughly 5.9% gain recorded by the industry.



 

Positive Earnings Surprise History: Innospec has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in three the trailing four quarters, delivering a positive average earnings surprise of 7.8%.

Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 for Innospec is currently pegged at $4.15, reflecting an expected year-over-year growth of 9.2%. Moreover, earnings are expected to register a 4.8% growth in 2018.

Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, Innospec is currently trading at trailing 12-month EV/EBITDA multiple of 9.6x, cheaper compared with the industry average of 10.9x.

Upbeat Outlook: Innospec, in its second-quarter earnings call, said that it is optimistic about meeting its expectations for 2017. The company also noted that new products will help it deliver sustainable growth in the longer term while its balanced capital management program should enable it create shareholder value moving ahead. Innospec also remains open to more acquisition opportunities. The company also sees healthy prospects for Oilfield Services for the balance of 2017.

Moreover, Innospec’s new fully-owned enterprise in China, Innospec Chemical (Beijing) Co. Ltd., is expected to help to gradually extend the company’s footprint in global markets as demand for specialty chemicals continues to grow, especially in China. It will also allow the company to manage and trade inventory locally and expand business in a thriving market.

Innospec will be able to improve customer services across all businesses in China including, performance chemicals, fuel specialties and oilfield services, as it looks forward to develop profitable solutions for long-term growth.
 

Innospec Inc. Price and Consensus

 

Innospec Inc. Price and Consensus | Innospec Inc. Quote

Other Stocks to Consider

Other stocks in the basic materials space worth considering include Kraton Corporation , The Chemours Company (CC - Free Report) and FMC Corporation (FMC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kraton has expected earnings growth of 7.2% for the current year.

Chemours has expected long-term earnings growth of 15.5%.

FMC has expected earnings growth of 11.3% for the current year.

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FMC Corporation (FMC) - $25 value - yours FREE >>

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