We believe that Heritage-Crystal Clean, Inc. (HCCI - Free Report) is a solid choice for investors, seeking exposure in the pollution control space. A diverse customer base, healthy prospects of Environmental Services and Oil Business segments, and other strategic initiatives for expanding businesses will be advantageous for the company.
The stock, with roughly $547.6 million market capitalization, was upgraded to a Zacks Rank #1 (Strong Buy) on Apr 4. Its investment appeal is further accentuated by a VGM Score of B.
Heritage-Crystal Clean delivered better-than-expected results in three of the last four quarters. Average earnings surprise was a positive 18.45%. Notably, its shares have rallied 3.5% in the last three months, outperforming 5.3% decline of the industry.
Why the Upgrade?
We are providing a snapshot of how Heritage-Crystal Clean fared in the fourth quarter of 2017. Its earnings of 26 cents surpassed the Zacks Consensus Estimate by 23.81%. Net sales were up 8.5% year over year on the back of healthy segmental performance of the Environmental Services and Oil Business segments.
We believe that a diverse customer base — primarily in vacuum services; industrial & hazardous waste; parts cleaning services; field services; anti-freeze; and used-oil services & used-oil re-refining markets — and an efficient management team add to Heritage-Crystal Clean’s appeal. Also, a large branch network — 86 branches at the end of 2017 — will help in carrying out operations smoothly for the company. Notably, it opened five new branches in the Environmental Services segment and also added resources (sales and services) with the latter anticipated generating revenues of $6 million in 2018. The company plans to open more branches and add resources in 2018, predicting revenue generation of $2.5 million from the latter.
Additionally, Heritage-Crystal Clean’s focus on expanding its operations through meaningful buyouts, enhancement in service offerings, more business in international arenas and growth in same-branch sales will work in its favor.
In the last 60 days, the company’s earnings estimates for 2018 was revised upward by four brokerage firms while that for 2019 by one firm. The Zacks Consensus Estimate currently stands at 92 cents per share for 2018 and $1.07 for 2019, reflecting an increase of 9.5% and 12.6%, respectively, from their tallies 60 days ago.
Also, the company has a positive Earnings ESP of 27.91% for the first-quarter of 2018 and 3.04% for 2018. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Heritage-Crystal Clean, Inc. Price, Consensus and EPS Surprise