Shares of Sigma-Aldrich ( SIAL) clocked a new 52-week high of $102.69 on Jul 8, exceeding its previous high of $102.46. The stock pulled back to end the trading session at $102.02 on that day.
The lab chemical and life sciences company, which has a market cap of around $12.1 billion, has seen its shares rise roughly 27% over a year, outperforming the rise in the S&P 500 for the period. Average volume of shares traded over the last three months is around 524.6K. The company’s long-term projected EPS growth is around 8%.
What's Driving SIAL Up?
Sigma-Aldrich saw its profit for first-quarter 2014 (reported on Apr 24) rise year over year as weakness in its research business was masked by gains in other areas. Adjusted earnings of $1.06 per share topped the Zacks Consensus Estimate of $1.03. The company has racked up positive earnings surprises in trailing four quarters with an average surprise of 2.71%.
Sigma-Aldrich’s significant investments in sales, marketing and R&D initiatives are generating demand for its products. The company remains focused on taking advantage of country-specific opportunities by expanding its presence in high-growth emerging markets. It is actively expanding its foothold in the Asia-Pacific region, especially in the fast-growing emerging markets of India and China.
Sigma-Aldrich has also taken up cost control and plant process improvement actions and is effectively managing its working capital, contributing to healthy free cash flow generation. The BioReliance acquisition, which extended the company's reach into the promising new market of biologic drugs, should add to its growth this year.
Moreover, Sigma-Aldrich remains committed to offering incremental returns to its shareholders through dividends and share repurchases. The company, in Feb 2014, announced a 7% hike in its quarterly dividend to 23 cents per share.
That said, Sigma-Aldrich’s research business, especially with large pharmaceutical companies, is expected to continue to face challenges due to weak academic spending in the U.S. and Europe.
Other Stocks to Consider
Other companies in the specialty chemicals space with favorable Zacks Rank include KMG Chemicals Inc. ( KMG), Minerals Technologies Inc. ( MTX) NL Industries Inc. ( NL) with all holding a Zacks Rank #1 (Strong Buy).