Innophos Holdings, Inc.’s (NASDAQ:IPHS) impressive second-quarter 2017 results, solid future prospects and acquisition initiatives make it a solid bet for investors now. It currently boasts a Zacks Rank #1 (Strong Buy).
In the last month, the company’s shares have yielded +4.05% return, outperforming 2% decline of the industry it belongs to.
Why the Upgrade?
We believe that last month’s share price rally was primarily driven by Innophos Holdings’ impressive second-quarter 2017 financial performance and future growth prospects. Notably, the company’s earnings of 57 cents per share surpassed the Zacks Consensus Estimate by 9.6%. Sales volumes in all segments were up year over year while the company’s margin profile benefited from cost-saving initiatives.
In the second half of 2017, the company is poised to gain from cost-savings from the Phase II of its Operational Excellence initiatives as well as continued improvement in volume gains. Further, the company might work for manufacturing optimization and enhancement of supply chain.
Additionally, Innophos Holdings’ decision to acquire New Jersey-based Novel Ingredients is in sync with its Strategic Growth initiatives. Novel Ingredients specializes in providing dietary supplement ingredient solutions. The acquired assets will be accretive to earnings per share in the initial year following the closure of the deal in the third quarter of 2017. Overall, the buyout will enable the company to create a Food, Health and Nutrition platform, with revenue generating capacity of $0.5 billion.
Investors seem to be optimistic about Innophos Holding’s future prospects, as evident from the positive revisions in earnings estimates for the stock. Over the last 30 days, the Zacks Consensus Estimate for the company increased 4.1% to 76 cents for third-quarter 2017 and 4.2% to $2.50 for 2017.
Innophos Holdings, Inc. Price and Consensus
Innophos Holdings, Inc. Price and Consensus | Innophos Holdings, Inc. Quote
Other Stocks to Consider
Innophos Holding has a market capitalization of approximately $875.7 million. Other stocks worth considering in the industry include Kronos Worldwide Inc. (NYSE:KRO) , Arkema SA (OTC:ARKAY) and Asahi Kasei Corporation (OTC:AHKSY) . All these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kronos Worldwide’s earnings estimates for 2017 and 2018 represent year-over-year growth of 354.8% and 25.5%, respectively. Also, the company pulled off an average positive earnings surprise of 76.05% in the last four quarters.
Arkema SA’s earnings estimates for 2017 and 2018 improved in the last 60 days.
Asahi Kasei Corporation’s earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days.
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Kronos Worldwide Inc (KRO): Free Stock Analysis Report
Arkema SA (ARKAY): Free Stock Analysis Report
Asahi Kasei Corp. (AHKSY): Free Stock Analysis Report
Innophos Holdings, Inc. (IPHS): Free Stock Analysis Report
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