American Vanguard Corp.
) saw its share price catapult roughly 124% in 2012, as this maker
of diversified specialty chemicals is seeing strong demand for soil
insecticides. Furthermore, the Zacks Rank #1 (Strong Buy) stock has
put together five positive earnings surprises in the past six
With a series of earnings beats, an above-average projection for
long-term earnings growth of 24% and favorable industry trends, AVD
appears to fit the bill for aggressive growth investors.
Strong Beat in Q3
On November 1, American Vanguard posted a solid jump in its
third-quarter 2012 profit, riding on strong market demand for its
products. Earnings of 28 cents per share topped the Zacks Consensus
Estimate by nearly 22% and surpassed last year's performance by as
much as 75%.
Revenues soared 23% year over year to $90.8 million, comfortably
beating the Zacks Consensus Estimate of $83 million. Gross margin
rose to 43.7% from 41.4% a year ago, aided by better mix, higher
pricing and manufacturing efficiency.
American Vanguard said results in the upcoming reporting periods
will be supported by the successful roll out of its herbicide
co-marketing program with Monsanto (
). The company also noted that its crop protection products will
aid sales growth and profitability.
American Vanguard is expected to report its fourth quarter results
on March 4. The Zacks Consensus Estimate is currently at 35 cents
Rising Earnings Estimates
The Zacks Consensus Estimate for 2012 has moved up roughly 5% in
the last 90 days to $1.22 per share, representing year-over-year
growth of around 52.5%. For 2013, the Zacks Consensus Estimate rose
roughly 7% over the same period to $1.57 per share, indicating an
estimated growth of 28.69%.
American Vanguard is currently trading at a forward P/E of 20.15x,
on par with the peer group average. The price-to-book of 4.10x is,
however, higher than the peer group average of 2.02x. Moreover, the
price-to-sales of 2.55x is well above the peer group average of
0.65x. The healthy earnings trajectory should lend support to
American Vanguard has been trading above the 200-day moving average
since November 2011. Interestingly, the 50-day moving average
continues to read higher than the 200-day moving average,
manifesting the bullish trend with the 200-day moving average
acting as the support level.
American Vanguard Corp. makes specialty chemical products for
agricultural and commercial applications. The company develops and
markets an array of chemicals, including insecticides, fungicides
and herbicides, for crops, human and animal health protection.
American Vanguard, which has a market cap of roughly $888 million,
has the largest assortment of corn soil insecticides coupled with
the most advanced dispensing equipment.
Other specialty chemical companies with favorable Zacks Ranks are:
American Pacific Corp. (
), with a Zacks Rank #1 (Strong Buy) and Georgia Gulf Corp. (
) with Zacks Rank #2 (Buy).
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