Zacks Investment Research upgraded Ferro Corporation FOE to a Zacks Rank #1 (Strong Buy) on Jan 9, 2016. Going by the Zacks model, companies holding a Zacks Rank #1 have strong chances of outperforming the broader market over the next few quarters.
Why the Upgrade?
Ferro Corporation performed better than expected in the last four quarters, delivering positive earnings surprises in three and negative in one quarter. Average earnings surprise was a positive 13.65%. Last quarter, the company’s earnings of 24 cents per share surpassed the Zacks Consensus Estimate of 22 cents.
Ferro Corporation’s top line grew 1.3% year over year on the back of higher sales in the Pigments, Powders and Oxides segment. Also, on a constant currency basis, value-added sales grew 18% year over year.
In addition, Ferro Corporation favors both organic and inorganic means for expanding its business portfolio. Recently, the company acquired 100% stake in Istanbul-based Ferer Dis Ticaret Ve Kimyasallar Anonim Sirketi A.S. The acquired assets are anticipated to generate sales of roughly $3 million in 2016 by strengthening the company’s presence in Turkey. Also, in Nov 2015, the company bought Eqypt-based tile coatings manufacturer Al Salomi for Frit and Glazes.
Impressive results and expectation of incremental sales benefits from acquired assets have rendered investors optimistic about Ferro Corporation’s prospects. Over the last 60 days, the Zacks Consensus Estimate for the stock has increased 1.8% to $1.11 per share for 2016.
Stocks to Consider
Ferro Corporation currently has a market capitalization of $833 million. Other stocks worth considering in the chemical industry include KMG Chemicals Inc. KMG, Green Plains Inc. GPRE and International Flavors & Fragrances Inc. IFF. While KMG Chemicals sports a Zacks Rank #1 (Strong Buy), both Green Plains and International Flavors & Fragrances carry a Zacks Rank #2 (Buy).
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