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Rockwood Upgraded to Strong Buy on Solid Q3 Earnings - Analyst Blog

On Dec 6, 2014, Zacks Investment Research upgraded Rockwood Holdings, Inc. ( ROC ) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3 (Hold), primarily on the back of healthy third-quarter 2014 earnings.

Why the Upgrade?

Over the last four trailing quarters, Rockwood Holdings generated a positive average earnings surprise of 8.16%. For third-quarter 2014, the company reported earnings of 63 cents per share that surpassed the Zacks Consensus Estimate by 10.5%. Moreover, in the last reported quarter, the company's earnings experienced a sequential rise of 1.6%. Such outcomes have helped stabilize investors' sentiments on the stock.

Rockwood Holdings is a premium specialty chemical company in the global basic materials industry. The company shares a high brand value in the market for its non-imitable services in the commercial and industrial space. In the last reported quarter, the company's net sales aggregated $356.3 million, increasing 3.03% year over year. Increased revenue was driven by growing market demand from all business divisions of the company.

Furthermore, on Nov 14, 2014, shareholders of Rockwood Holdings had officially accepted the acquisition offer from Albemarle Corporation ( ALB ). According to this deal, Rockwood Holdings would become a wholly-owned subsidiary of Albemarle Corporation.

The new acquisition deal is expected to improve Rockwood Holdings' scope for business internationalization and also enhance the quality of its product offerings in the market. Also, after becoming Albemarle's wholly owned subsidiary, productive resource bases of the company are expected to improve. Based on such optimistic views, we have upgraded Rockwood Holdings to a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Rockwood Holdings currently has a market capitalization of $5.68 billion. Some other stocks worth considering in the industry include NL Industries Inc. ( NL ) and Taminco Corporation ( TAM ). Both the stocks possess a Zacks Rank similar to that of Rockwood Holdings.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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