For Immediate Release
Chicago, IL – August 3, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Sigma-Aldrich Corporation (SIAL), Bayer AG (BAYRY), Reliance Steel & Aluminum Co. (RS), Metals USA Holdings Corp. (MUSA) and Worthington Industries Inc. (WOR).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday’s Analyst Blog:
Sigma-Aldrich Inks Deal
Sigma Life Science, the biological products and services arm of Sigma-Aldrich Corporation (SIAL), announced a deal with Axiogenesis to launch mouse induced pluripotent stem (iPS) cell-derived cardiomyocytes and smooth muscle cells. These cardiomyocytes and smooth muscle cells aid in long-term studies to accurately measure cardiotoxicity in drug trials.
Axiogenesis' iPS cell-derived cardiomyocytes help in diagnosing toxic elements that are not possible through other experiments. These cardiomyocytes also maintain physiologically-relevant biology, purity and spontaneous beating for longer than 28 days. On the other hand, Sigma Life Science's existing stem cell product portfolio provides ample support for iPS cell-related research.
Axiogenesis AG is a biotechnology company that develops novel assays that use differentiated embryonic stem cell that display normal physiological behavior. Axiogenesis is expanding its portfolio through the iPS technology by introducing murine IPS based products and services.
Sigma-Aldrich, a life-science and specialty chemical company, releases its second quarter 2012 earnings last month. The company posted adjusted earnings of 97 cents per share in the quarter, meeting the Zacks Consensus Estimate while exceeding the year-ago earnings of 93 cents. Profit, as reported, marginally increased to $115 million or 94 cents per share in the quarter from $113 million or 91 cents a year ago.
Revenues came in at $664 million in the quarter, up 4% year over year, but below the Zacks Consensus Estimate of $673 million. Acquisitions contributed 6% to the growth while foreign exchange translation had an unfavorable impact of 5%. The company saw growth across its Research Chemicals and Fine Chemicals (“SAFC”) divisions.
Moving ahead, Sigma-Aldrich expects organic growth to be in low-to-mid single digits in 2012, down from the earlier expectation of mid-single-digits. Macroeconomic uncertainties may hinder its Research Chemicals business, whereas growth in Bioscience and Hitech is expected to drive SAFC sales for the remainder of the year. The acquisitions of BioReliance and Research Organics are expected to boost sales by 6%.
The company, which competes with Bayer AG (BAYRY) and other privately held companies, such as Brenntag AG and VWR Funding Inc., maintains a Zacks #4 Rank, which translates into a short-term (1 to 3 months) Sell rating.
S&P Raises Reliance Steel’s Rating
As reported by Reuters, ratings agency Standard & Poor’s recently raised the ratings of Reliance Steel & Aluminum Co. (RS), including its senior unsecured debt and corporate credit ratings, to 'BBB' from 'BBB-.’ S&P also maintained a ‘Stable’ outlook for the company’s ratings.
The positive ratings action was based on the size and diversification of the company’s distribution business, which has consistently maintained its margins and improved credit metrics over time. S&P expects this performance to continue in the long term and hence raised the ratings.
The rating upgrade also reflects the demand for Reliance Steel’s products in its important end markets and its ability to maintain steady revenue and EBITDA growth over the past few years even amid a sluggish economic recovery.
Moreover, S&P cited that inorganic growth strategy and improvement in energy and aerospace end markets could help the company mitigate soft demand from non-residential construction markets.
The ratings agency also believes that Reliance’s revenues will grow in the high single-digits this year. Moreover, increased demand is expected to result in a 10% rise in sales volume this year and help offset the negative impact of declining steel prices.
S&P rated the company’s liquidity position as “strong.” Reliance had total liquidity of $705 million, as of June 30, 2012. Moreover, the ratings agency believes that Reliance’s internally generated cash flow of $450-$500 million would suffice its working capital requirements.
In addition, Reliance is well placed to manage its overall debt maturities. The company will likely repay the forthcoming maturity of $75 million of unsecured private placement notes with cash next year. Also, Reliance has complied with the covenants attached to its revolving credit facility quite successfully and would probably sustain the trend over the next two years.
However, S&P said that any near-term ratings upgrade is unlikely owing to Reliance’s inorganic growth strategy and a sluggish nonresidential construction market. Moreover, the ratings might be downgraded in case Reliance takes on excessive debt for financing its acquisitions or returning cash to shareholders. Also, a further decline in steel prices, which would hurt margins, or a deceleration in demand from Reliance’s end markets might result in a downgrade.
We currently have a long-term Outperform recommendation on Reliance Steel. The company, which competes with Metals USA Holdings Corp. (MUSA) and Worthington Industries Inc. (WOR), maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com
- Investment & Company Information
- Financial Technical Analysis