) reached a new 52-week high of $104.22 on Aug 19, exceeding its
previous high of $104. The stock retraced a bit to end the trading
session at $104.14 on that day.
The lab chemical and life sciences company, which has a market cap
of around $12.4 billion, has seen its shares rise roughly 11% so
far this year. Average volume of shares traded over the last three
months is around 506K. The company's long-term projected EPS growth
is around 8.1%.
What's Driving SIAL Up?
Sigma-Aldrich's second-quarter 2014 results, reported on Jul 24,
were a mixed bag with earnings narrowly beating the Zacks Consensus
Estimate while sales missing the same. Profit rose year over year
on healthy momentum in the company's Applied division.
Sigma-Aldrich modestly raised its earnings guidance for 2014. The
company has delivered positive earnings surprises in trailing four
quarters with an average beat of 2.45%.
Sigma-Aldrich, a Zacks Rank #3 (Hold) stock, remains focused
on taking 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. Moreover, the
company's significant investments in sales, marketing and R&D
initiatives are generating demand for its products.
Sigma-Aldrich has also taken up cost control and plant process
improvement actions 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.
Moreover, Sigma-Aldrich remains committed to offering incremental
returns to its shareholders through dividends and share
That said, Sigma-Aldrich's research business, especially with large
pharmaceutical companies, is expected to continue to face
challenges due to a still uncertain academic spending environment.
Uncertainty surrounding academic funding is expected to sustain in
the near term.
Other Stocks to Consider
Other companies in the specialty chemicals space with favorable
Zacks Rank include Green Plains Inc. (
), Ferro Corp. (
), BioAmber Inc. (
). While Green Plains holds a Zacks Rank #1 (Strong Buy), Ferro and
BioAmber retain a Zacks Rank #2 (Buy).
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