CECO Environmental Corp. (CECE - Free Report) currently seems to be a smart choice for investors seeking exposure in the pollution control space. Solid fundamentals and positive revision in earnings estimates are reflective of healthy growth potential of the stock.
This Dallas, TX-based company currently carries a Zacks Rank #2 (Buy). It belongs to the Zacks Pollution Control industry, currently placed in the top 43% (with Zacks Industry Rank #110) of more than 250 Zacks industries. Notably, the top 50% of the Zacks-ranked industries tend to outperform the bottom 50% by a factor of more than 2 to 1.
We believe that stringent government regulations, pollution-related risks and growing demand in emerging nations are aiding pollution control equipment and services.
Below we discussed why investing in CECO Environmental will be a smart choice.
Share Price Performance, Impressive Earnings Outlook: Market sentiments seem to be working in favor of CECO Environmental over time. In the past year, its share price has gained 44.2% compared with the industry’s growth of 19.8%.
It is worth mentioning here that the company’s shares have gained 14.9% since the release of first-quarter 2019 results on May 8, 2019. Its quarterly earnings of 12 cents per share were 50% above the Zacks Consensus Estimate of 8 cents. Average earnings surprise for the last four quarters was a positive 25%.
Solid backlog, which stood at $193.8 million at the end of the first quarter, and contract wins will be beneficial for the company going forward.
In the past 60 days, earnings estimates for 2019 and 2020 have been revised upward, reflecting positive sentiments about the company’s growth prospects. Currently, the Zacks Consensus Estimate for earnings for CECO Environmental is pegged at 53 cents for 2019 and 58 cents for 2020, suggesting growth of 29.3% and 3.6% from the respective 60-day-ago figures. In addition, earnings estimates for the second quarter of 2019 have grown from 9 cents per share to 11 cents.
CECO Environmental Corp. Price and Consensus