) reached a new 52-week high of $98.18 on May 27, eclipsing its
previous high of $98.04. The stock retraced a bit to end the
trading session at $98.01 on that day.
The lab chemical and life sciences company, which has a market cap
of around $11.7 billion, has seen its shares rise roughly 17% over
a year. Average volume of shares traded over the last three months
is around 549.5K.
What's Driving SIAL?
Sigma-Aldrich's profit for first-quarter 2014, reported on Apr 24,
rose year over year as weakness in its research business was offset
by gains in other areas. Adjusted earnings of $1.06 per share
topped the Zacks Consensus Estimate of $1.03.
Sigma-Aldrich, a Zacks Rank #3 (Hold) stock, has delivered positive
earnings surprises in trailing four quarters with an average
surprise of 2.71%.
Sigma-Aldrich's significant investments in sales, marketing and
R&D initiatives are generating demand for its products. The
company is seeking to take advantage of country-specific
opportunities by expanding its presence in high-growth emerging
markets. It is actively expanding its foothold in the Asia-Pacific
region, especially in the fast-growing emerging markets of India
Sigma-Aldrich has also taken up cost control and plant process
improvement measures and is effectively managing its working
capital, contributing to healthy free cash flow generation. The
BioReliance acquisition, which extended the company's reach into
the promising new market of biologic drugs, should add to its
growth this year.
In addition, Sigma-Aldrich remains committed to offering
incremental returns to its shareholders through dividends and share
repurchases. The company, in Feb 2014, announced a 7% hike in its
quarterly dividend to 23 cents per share.
That said, Sigma-Aldrich's research business, especially with large
pharmaceutical companies, is expected to continue to face
challenges due to weak academic spending in the U.S. and Europe.
Uncertainty surrounding academic funding (in particular in the
U.S.) is expected to sustain through first-half 2014.
Other Stocks to Consider
Other companies in the specialty chemical space with favorable
Zacks Rank include
International Flavors & Fragrances Inc.
Sensient Technologies Corporation
) with all holding a Zacks Rank #2 (Buy).
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