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Innospec (IOSP) Stock Up 27% in 3 Months: What's Driving It?

Anindya Barman

Shares of Innospec Inc. IOSP have popped 27% over the last three months. The company has also trounced its industry’s rise of roughly 6% over the same time frame.  

Innospec has a market cap of roughly $2 billion. Average volume of shares traded in the last three months is around 97K.

Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.


Driving Factors

Strong fourth-quarter results and upbeat prospects have contributed to a rally in the company’s shares. Innospec swung to a profit of $20.4 million or 83 cents per share in the fourth quarter from a loss of $4.8 million or 20 cents in the year-ago quarter.

Adjusted earnings of $1.62 per share for the quarter were up from $1.47 per share a year ago. It also exceeded the Zacks Consensus Estimate of $1.35. The results were aided by the company’s actions to manage costs.

The chemical maker’s revenues went up roughly 12% year over year to $395 million in the quarter. The company saw strong growth in its Fuel Specialties and Oilfield Services units.

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%.

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.

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.

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

Stocks Worth a Look

Other top-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. KL, W. R. Grace & Co. GRA and Israel Chemicals Ltd. ICL.

Kirkland Lake Gold has an expected earnings growth rate of 47.2% for the current year and carries a Zacks Rank #1. Its shares have shot up around 120% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

W. R. Grace has an expected earnings growth rate of 10.3% for the current year and carries a Zacks Rank #2 (Buy). Its shares have gained roughly 16% in the past year.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2. The company’s shares have rallied around 21% over the past year.  

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