Shares of
Ingevity Corporation
NGVT
have shot up 27.4% over the past six months. The rally has resulted in the stock outperforming its
industry
’s decline of 13.5% over the same time frame. The specialty chemicals and materials maker has also topped the S&P 500’s 18.7% rise over the same period.
Let’s take a look into the factors behind the stock’s price appreciation.
What’s Favoring NGVT?
Ingevity, a Zacks Rank #3 (Hold) stock, is benefiting from growth in its applications driven by regulations and technology adoption, its cost-saving actions and the acquisition of the Capa caprolactone business.
The company witnessed a strong recovery in the automotive market in the United States and Canada and continued strong demand in China in the third quarter of 2020. It is gaining from higher sales in China as automakers in the country have completed the implementation of the China 6 standard. It saw higher demand in China in the third quarter on the back of the China 6 implementation.
Ingevity is also seeing strong sales for its pavement technologies and achieved record sales in the third quarter on strength across China and EMEA. It is witnessing continued adoption of the Evotherm warm-mix technology.
Moreover, the company is taking certain cost-reduction measures in the wake of the coronavirus pandemic to boost profitability. These actions include reduction of headcount through an early retirement program, streamlining of manufacturing processes and reduction of traveling expenses and plant spending. The company’s cost actions are expected to support its bottom line.
The acquisition of the Capa caprolactone business has also enabled Ingevity with a new technology platform to drive revenue and earnings growth. Capa has a strong and market-leading business that focuses on high-growth end-use applications.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart
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Ingevity Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include
Fortescue Metals Group Limited
FSUGY
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Fortescue has a projected earnings growth rate of 73.5% for the current fiscal. The company’s shares have surged around 158% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have rallied around 37% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 49.2% for the current fiscal year. The company’s shares have gained around 33% in a year. It currently carries a Zacks Rank #1.
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