Element Solutions Inc.
‘s
ESI
shares have popped 29% over the past three months. The company is benefiting from strength in its electronics business, a recovery in the automotive industry and its cost-containment measures.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
An Outperformer
Shares of Element Solutions have shot up 35.5% over a year against the 10.5% rise of its
industry
. It has also outperformed the S&P 500’s 17.4% rise over the same period.
Estimates Moving Up
Over the past two months, the Zacks Consensus Estimate for Element Solutions for the current year has increased around 4.8%. The consensus estimate for 2021 has also been revised 7.2% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
Element Solutions has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 18.4%, on average.
Upbeat Prospects
The company is expected to gain from healthy demand in its high-end electronics business and the rebound in the automotive industry. It is witnessing a recovery in its end markets from the coronavirus-induced slowdown.
Element Solutions saw a strong recovery in its automotive and industrially oriented businesses in the third quarter from the second-quarter lows. Its high-end electronics business also continued its momentum in the third quarter, driven by consistent strong demand. Element Solutions believes that it has ample growth opportunities based on the megatrends driving its markets and its ability to outperform its markets through sound strategic execution.
The company is also implementing a number of cost-containment measures including reduction of traveling costs. These actions are likely to support its margins in 2020.
Element Solutions should also benefit from the acquisitions of Kester and DMP Corporation. The Kester acquisition has added capabilities and scale to its existing electronics assembly materials business. Moreover, the DMP buyout has expanded Element Solutions’ investment in technology to offer innovative solutions. The company expects these two acquisitions to benefit its net sales by roughly $15 million in the fourth quarter of 2020.
Element Solutions Inc Price and Consensus
Element Solutions Inc price-consensus-chart
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Element Solutions Inc Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include
Bunge Limited
BG
,
BHP Group
BHP
and
Silvercorp Metals Inc.
SVM
.
Bunge has an expected earnings growth rate of 43% for the current year. The company’s shares have gained around 14% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
BHP Group has a projected earnings growth rate of 32.4% for the current fiscal year. The company’s shares have gained around 20% in a year. It currently carries a Zacks Rank #2.
Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 17% in the past year. It currently carries a Zacks Rank #2.
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