) is a Zacks #1 Rank (Strong Buy) after posting four upside
surprises and gets higher estimates for 2012. Its low multiples
make it worth a look for value investors.
Chemtura Corporation, manufactures specialty chemical solutions and
consumer products. The company's Consumer Products segment provides
recreational water purification products, such as sanitizers,
algaecides, biocides, oxidizers, pH balancers, mineral balancers,
and other specialty chemicals and accessories.
Four Straight Beats
CHMT has racked up four straight positive earnings surprises.
Starting in the March 2011 quarter with a $0.04 beat, the company
continued to beat the lone estimate in the following quarter.
Another analyst picked up coverage in the September 2011 quarter
giving a little more meaning to the Zacks Consensus Estimate. That
didn't make much difference when the company reported earnings as
they beat by a penny.
CHMT Recently Reported Earnings
On February 27, 2012 the company reported revenue of $677 million
slightly below estimates and nearly equivalent to the year ago
period. In addition, earnings per share came in at $0.26 up from
$0.01 posted a year ago and $0.15 ahead of the Zacks Consensus
Estimate. As a result, the stock moved higher by more than 8%.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up their
earnings estimates for 2012. The Zacks Consensus Estimate for 2012
EPS moved from $1.00 in January 2012 to the current level of $1.31.
CHMT hit our value screen due to its relatively low PE and price to
book. The trailing (13.5x) and forward (11.5x) PE carry a slight
premium to the industry averages of 11.4x and 10.2x, respectively.
There is a sizeable discount in the price to book multiple for CHMT
when compared to the industry average. A 1.4x multiple for price to
book is just what value investors look for, especially when the
industry average is 2.1x.
A quick look at the chart shows that the stock has participated in
the most recent rally. Moving from just under $11 at the beginning
of the year to as much as $16 of late. Value investors may shy away
from a stock that has moved that much over just a few months, but
the valuation metrics make the stock attractive no matter what the
recent movement has been. CHMT is a Zacks #1 Rank (Strong Buy).
Aggressive Growth Link
Back on December 30, 2011 CHMT was the subject of an aggressive
growth Rank Buy article at Zacks. Since that time the stock has
appreciated by approximately 35%.
Chemura: Aggressive Growth Stock Dec 30, 2011
Brian Bolan is the Aggressive Growth Stock Strategist for
Zacks.com. He is also the Editor in charge of the
Run Investor service
CHEMTURA CORP (
): Free Stock Analysis Report
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