Innospec Inc.’s IOSP stock looks promising at the moment. The company, currently sporting a Zacks Rank #1 (Strong Buy), has seen its shares surge around 37% year to date.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let's see what makes this chemical company a compelling investment option at the moment.
Innospec has significantly outperformed the industry it belongs to over a year. The company’s shares have gained 21.1% compared with a roughly 21.8% decline recorded by the industry. The company has also outpaced the S&P 500’s rise of 8.9% for the same period.
Earnings estimate revisions have the greatest impact on stock prices. Estimates for 2019 for Innospec have moved up over the past two months. Over this period, the Zacks Consensus Estimate for the year has increased by around 5.3%. The Zacks Consensus Estimate for earnings for 2019 is currently pegged at $5.00 per share, reflecting an expected year-over-year growth of 3.5%.
Positive Earnings Surprise History
Innospec has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this timeframe, the company has delivered a positive average earnings surprise of roughly 8%.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Innospec is 14.3%, above the industry’s level of 10.6%.
Growth Drivers in Place
Innospec is gaining from its balanced portfolio and strategic focus on major end markets. The company remains focused on growing sales and improving margins and is also looking to improve the effectiveness of its operations. It also has significant organic growth projects in its pipeline.
Innospec is also engaged in acquisition opportunities leveraging its strong balance sheet and cash flows, which the company believes will strengthen its business. The company’s net cash from operating activities jumped around 47% year over year to $69.8 million in the fourth quarter of 2018. Operating cash generation for 2018 also increased 27% year over year.
The company, in its fourth-quarter call, said that it has several significant organic growth options that along with potential acquisition opportunities will deliver further value for its shareholders. The company believes that it can continue to deliver positive growth in 2019 amid tough challenges driven by the instability in the geopolitical environment.
Innospec Inc. Price and Consensus
Innospec Inc. Price and Consensus | Innospec Inc. Quote
Other Stocks Worth a Look
Other stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. KL, Ingevity Corporation NGVT and W. R. Grace & Co. GRA.
Kirkland has an expected earnings growth rate of 51.5% for the current year and carries a Zacks Rank #1. The company’s shares have surged around 101% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has an expected earnings growth rate of 17.9% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 48% in the past year.
W. R. Grace has an expected earnings growth rate of 10.4% for the current year and carries a Zacks Rank #2. Its shares have gained around 18% in the past year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Innospec Inc. (IOSP) : Free Stock Analysis Report
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