Innophos Holdings, Inc. (IPHS: 29.35 0.00 0.00%) recently touched its multi-year high at $31.98 after reporting a solid 17% earnings surprise in early August. With a next-year estimate calling for 19% growth, the longer-term picture looks good too for this Zacks #1 rank stock.
Company Description
Innophos Holdings, Inc., together with its subsidiaries, produces a line of specialty phosphate products for food, pharmaceutical and industrial markets with a market cap of $632 million.
The last look at Innophos came in early August when the company reported solid Q2 results that easily beat expectations.
Second-Quarter Results
Revenue for the period was up 10% from last year to $184 million. Earnings also came in strong at 79 cents, 18% ahead of the Zacks Consensus Estimate. In spite of one 44% miss two quarters ago, the company now has an average earnings surprise of 18% over the last four quarters.
Innophos's largest segment, Specialty Phosphates, saw volumes jump 21% from last year, although revenue was only up 1% as prices remained depressed from peak levels last year.
The company also saw its margins expand after a reset of some of its supply contracts reset in early 2010.
Paying Down Debt
Innophos's balance sheet is also on the upswing off the good quarter, with its total debt down $56 million from last year. Its debt-to-equity ratio of 60% is well ahead of its peer average of 103%.
Estimates
Estimates took a nice little jump off the good quarter, with the current year adding 18 cents to $2.83. The next-year estimate is up 36 cents in the same time to $3.35, a 19% growth projection.
Valuation
In spite of the solid upward momentum, IPHS offers a good helping of value, trading with a forward P/E of 10.5X compared to its peer average of 14.4X.
2-Year Chart
On the chart, IPHS recently came within striking distance of the 52-week high just shy of $32. The stochastic below the chart is signaling that shares are trading well away from over-bought territory. Look for support from the trend line and short-term low at $29 on any weakness. Take a look below.
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