FutureFuel (FF - Free Report) is a name that is flying under the radar for most investors, so let's take a look at the most recent earnings report and why I like this Zacks Rank #1 (Strong Buy) which happens to be the Bull of the Day.
Why I Like It
A good earnings history when compared to the Zacks Consensus Estimate.This is a small-cap stock, and small caps have been running lately.
Recent jump of 8% in earnings estimates.
The Recent Numbers
I like to do a review of the most recent quarter for stocks that I highlight as Bulls of the Day. FF reported the September 2016 quarter last week and beat handily on the bottom line.
The company posted EPS of $0.29 when the Zacks Consensus Estimate was calling for $0.24. Revenue came in $17M below expectations for a 19% negative revenue surprise. As a result, the stock was bid up by more than 4.3% in the session following the report.
Description
Earnings History
The company has a good history of beating the Zacks Consensus Estimate. There have been two miss and five beats in the last seven reports.
Estimates
The estimate picture looks really good, with the Zacks Consensus Estimate for 2016 moving from $1.00 in October to $1.08 in November. The single analyst estimate was as low as $0.90 back in February of this year.
Valuation
The valuation for FF is one that I really like to see. The forward PE of 11.5x is well below the historic market multiple of around 18x. The Zacks Industry average multiple is a negative number, which suggests the competition for FF is going to be posting losses over the next twelve months. That is a huge positive for this stock as discerning investors may not even look at the other names as potentials to invest in. The company trades in line with the industry average in terms of price to book at 1.3x. Finally, the price to sales multiple of 2.5x is sharply higher than the industry average of 1x.
Chart
Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color-coded line represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #1 (Strong Buy) we see that estimates are moving higher.
Now see our private trades
Today's Bull of the Day is a promising buy that we're sharing with the public. Now would you like to look behind the curtain and view all our private portfolios? Starting today, for the next month, you can follow them in real time from value to momentum . . . from stocks under $10 to ETF and option plays . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even be privy to portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks moves >> >>
By Brian Bolan
No comments:
Post a Comment