U.S. pork processor Smithfield Foods, Inc. (SFD) has announced that the Committee on Foreign Investment in the United States (CFIUS) will carry out a second phase 45-day review of the proposed merger of Smithfield with Hongkong-based meat processor, Shuanghui International Holdings Ltd, pursuant to the Exon-Florio legislation.
Per the legislation, the Committee is in charge of reviewing foreign acquisitions made by U.S. companies for potential national security concerns. The 30-day review period starts from the time a potential acquisition is reported. Following the end of the 30-day period, CFIUS can exercise its option to extend the term to a maximum of another 45 days.
The deal was signed on May 30, whereby Shuanghui agreed to acquire all of the outstanding shares of Smithfield for $34.00 per share totaling $7.1 billion, including Smithfield’s debt. The deal will allow Smithfield to expand its footprint in China taking advantage of Shuanghui's solid distribution network. As far as Shuanghui is concerned, it will be able to meet the growing demand for pork in its domestic market by gaining control of Smithfield’s brands, such as Smithfield, Armour and Farmland that meet food safety standards.
However, the transaction is yet to receive shareholder and related federal regulatory approvals. The main concern for U.S. regulators is that the deal should not jeopardize the American food supply chain and harm the entire U.S. pork industry as they do not find Shuanghui’s food safety practices in China acceptable.
Smithfield’s CEO has assured that the transaction will have no impact on U.S. food supply. The company will continue to produce pork maintaining highest food safety standards and abide by the U.S. regulations. In addition, Smithfield stated that it will continue its contracts with more than 2,000 family farmers even after the merger. Smithfield believes that the deal will create an opportunity for U.S. hog farmers to expand production.
Smithfield also assured U.S. regulators that there will be no change in the company’s management team and all the employees of Smithfield will be retained, following the completion of the deal. Virginia will continue to remain the headquarters of Smithfield and C. Larry Pope will carry on in his responsibilities as the company’s president and CEO.
Both Smithfield and Shuanghui International have agreed to cooperate with CFIUS and will not divulge details during the review period. Both the companies expect the transaction to close in the second half of 2013.
We note that Smithfield’s results have been suffering since the last few years as a result of higher grain costs and declining pork demand. In addition, oversupply of hogs has resulted in lower hog prices, which along with higher grain costs lowered margins. This deal will prove to be a boon for Smithfield as it will provide opportunities to increase the presence of its brands in China. It will also be able to meet the rising demand for pork in China, which accounts for about 50% of the world's pork consumption.
Smithfield holds a Zacks Rank #3 (Hold). Meat producers like Pilgrim’s Pride Corp (PPC), Sanderson Farms Inc (SAFM) and Tyson Foods Inc (TSN) are better placed and are worth considering. While Sanderson carries a Zacks Rank #1 (Strong Buy), Tyson and Pilgrim’s Pride hold a Zacks Rank #2 (Buy).
Zacks Investment Research downgraded Altra Holdings, Inc. (AIMC) to a Zacks Rank #5 (Strong Sell) on Jul 27, based on weak second-quarter 2013 results combined with a weak outlook for the quarters ahead.
Why the Downgrade?
Altra reported earnings per share of 41 cents in the second quarter of 2013, missing the Zacks Consensus Estimate by 12.8%. Revenues came in at $181.1 million, missing the Zacks Consensus Estimate of $189.0 million as well as the year-ago quarter’s revenues by 3.6%.
The decline was brought about by a downturn in demand of the capital-intensive end markets like metals, mining and energy. Moreover, demands in North America and Asia were lower than expected. Margins also faced a decline in the quarter owing to higher selling, general and administrative (SG&A) expenses. The trend is expected to continue in the coming quarters as well.
Accordingly, Altra has reduced its outlook for 2013. The company expects revenues in the range of $715.0 million to $730.0 million in 2013, down from $740.0 million to $750.0 million as expected earlier. Moreover, Altra lowered its earnings per share expectation to a range of $1.52 to $1.64 from $1.75 to $1.85 as expected before.
Subsequent to the results, Altra witnessed a downward revision for most of its estimates for years 2013 and 2014. All the estimates have been revised downwards for 2013, resulting in a decline in the Zacks Consensus Estimate by 8.2% to $1.67 per share, over the last 7 days. The Zacks Consensus Estimate for 2014 was also reduced by 5.7% to $1.99 per share in the same period.
Other Stocks to Consider
Other machinery stocks that are worth a look include Gorman-Rupp Co. (GRC), Chart Industries Inc. (GTLS) and Dover Corporation (DOV). While Gorman-Rupp carries a Zacks Rank #1 (Strong Buy), Chart Industries and Dover Corporation carry a Zacks Rank #2 (Buy).
Applied Micro Circuits Corp (AMCC) recently claimed that its embedded Server-on–a-Chip (SoC) products have gained traction in the Consumer Premise Equipment (CPE) and Enterprise markets. The embedded server on chips are used in a variety of designs, including enterprise and consumer access points, Multimedia Over Coax Alliance (MoCA) gateways and Long Term Evolution (LTE) gateway boxes.
Applied Micro has gained a formidable position in the server solutions and wireless market, fuelled by its advanced and innovative technologies. The company has shipped over two million embedded processors to Wistron NeWeb Corporation (WNC) – a provider of premium Original Design Manufacturer (ODM) services of advanced wireless communications products to service providers.
Applied Micro’s product portfolio and continued efforts to provide maximum consumer satisfaction have augmented its market position. The integrated offload engines and advanced PacketPro architecture offer quality service and security and performance to its customers. With advanced PacketPro solutions, the company aims to deliver world-class carrier gateway systems.
Headquartered in Sunnyvale, Calif., Applied Micro is a leading provider of high-bandwidth low power integrated circuits (ICs), which are essential for the processing, transporting and storing of information. The company provides semiconductor solutions for the enterprise, telecom and consumer/small medium business.
In the last reported quarter, net sales for the company came in at $54.1 million versus $41.3 million in the year-earlier quarter. Applied Micro expects to continue its healthy revenue momentum with new product developments and increased market acceptance in the coming quarters.
Applied Metro currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth considering in the industry include Diodes Incorporated (DIOD), LSI Corporation (LSI) and OmniVision Technologies, Inc (OVTI), each carrying a Zacks Rank #1 ( Strong Buy).
The HealthCare segment at Bayer (BAYRY) recently received encouraging news from the European Committee for Medicinal Products for Human Use (CHMP), when it gave a positive opinion on the EU approval of eye drug, VEGF Trap-Eye.
Bayer is looking to get VEGF Trap-Eye approved in the EU for the treatment of visual impairment due to macular edema secondary to central retinal vein occlusion (CRVO). A final verdict from the European Commission on the approval of VEGF Trap-Eye in this indication is expected later this year.
We note that though the European Commission is not bound to follow the CHMP’s decision, it generally does so.
Bayer has a collaboration agreement with Regeneron Pharmaceuticals Inc. (REGN) for the global development of Eylea (U.S. trade name of VEGF Trap-Eye). Per the terms of the agreement, Regeneron owns the entire U.S. rights pertaining to the eye drug. Bayer is however responsible for marketing Eylea in ex-U.S. markets on approval. The profit earned from the sales of Eylea in those markets will be shared equally by the companies. However, in Japan, Regeneron will receive royalties on Eylea’s net sales.
VEGF Trap-Eye is already approved in the U.S. for the CRVO indication since Sep 2012 under the trade name of Eylea. Eylea is also approved in the U.S. for the treatment of neovascular (wet) age-related macular degeneration (AMD).
We also note that EYLEA is approved in Europe, Japan, Australia, and several other countries for the wet AMD indication.
Bayer is looking to expand VEGF Trap-Eye’s indication further in the myopic choroidal neovascularization (mCNV) indication. In Jun 2013, the company reported positive top-line results from the phase III MYRROR study on VEGF Trap-Eye in patients suffering from mCNV. Bayer intends to submit its first regulatory approval application in Asia for VEGF Trap-Eye in this indication later in the year.
Eylea sales came in at €49 million in the first quarter of 2013 as per Bayer.
Bayer, a large cap pharma stock, presently carries a Zacks Rank #3 (Hold). However, another large cap pharma stock, Johnson & Johnson (JNJ), currently looks better positioned with a Zacks Rank #2 (Buy).
Other companies in the pharma space that are worth considering include Jazz Pharmaceuticals Public Limited Company (JAZZ), which carries a Zacks Rank #1 (Strong Buy).
T-Mobile US, Inc. (TMUS) makes another attractive offer by introducing zero down payment plans for 4GLTE-based phones and tablets. This zero down payment scheme is available at all T-Mobile retail and online stores from Jul 27, 2013.
The cost of the device will be divided into 24 monthly installments without any interest or service contract. Moreover, the plan comes with a Simple Choice Plan, which features unlimited talk, text and 500 MB of data usage for $50 per month.
A few days back, T-Mobile US launched Jump plan, which allows subscribers to upgrade their handset twice a year rather than in two years, as in the case of other carriers.
The company is charging $10 a month for Jump, which also offers insurance coverage. The customer can avail the first upgrade service after six months, after which there will be no waiting period.
A few months back, T-Mobile US launched another contract-less service called Uncarrier. This plan allows subscribers to buy smartphones like Apple Inc.’s (AAPL) iPhone at $100 and pay the balance in installments of $20 per month for the next two years.
Unsuccessful merger attempt with AT&T, Inc. (T) coupled with the unavailability of iPhones in its smartphone portfolio had led to a continuous loss of subscribers.
T-Mobile US is implementing these strategies to improve its business. The company has already gained 3,000 subscribers in the first quarter of 2013 as compared with a loss of 261,000 subscribers in the prior-year quarter.
Therefore, we believe that such strategies undertaken by T-Mobile US will not only help it to safeguard its position against top carriers like AT&T and Verizon Communication Inc. (VZ) but will also allow it to take unprecedented lead over its rivals.
T-Mobile US currently carries a Zacks Rank #3 (Hold).
Corning Inc. (GLW) is set to report second quarter 2013 results on Jul 30. Last quarter, it posted a 15.0% positive surprise. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
Though the company’s revenue was down both sequentially as well as from the year-ago quarter, first-quarter earnings were above the Zacks Consensus Estimate by 4 cents due to favorable currency movements and a lower tax rate.
The first quarter was strong for Corning in terms of margin growth. This was mainly because of improvements in telecom and specialty materials margin that offset the price declines in the glass business.
Corning provided a tepid outlook for the second quarter, with gross margin expected to be flat sequentially. The tax rate for the core business is expected to be 16% while core earnings is likely to be down 15% year over year (roughly 23 cents, which is well below the Zacks Consensus Estimate of 31 cents).
Our proven model does not conclusively show that Corning will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents. Hence, the difference is 0.00%.
Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Our model states that astock needs to have both a positive earnings ESP and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You could, therefore, consider other stocks like:
InvenSense Inc. (INVN), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)
Gartner Inc. (IT), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy)
Scientific Games Corporation (SGMS), with an ESP of +100.0% and a Zacks Rank #3 (Hold)
Lear Corp. (LEA) posted a 20.0% rise in adjusted earnings per share to $1.62 in the second quarter of 2013 from $1.35 in the corresponding quarter last year. With this, earnings beat the Zacks Consensus Estimate by a significant margin of 27 cents.
Adjusted net earnings rose only 2.1% to $138.3 million in the quarter from $135.4 million in the year-ago quarter. The significant rise in earnings per share compared to a meager rise in net earnings can be attributable to a year-over-year decrease in average shares outstanding during the quarter.
Revenues increased 12.2% to $4.1 billion in the reported quarter, surpassing the Zacks Consensus Estimate of $3.9 million. Global industry production increased 3% year over year, with an 11% rise in China and 6% hike in North America. Industry production in Europe and Africa went up 2% for the first time since the fourth quarter of 2011.
Revenues from the Seating segment went up 9.9% to $3.1 billion, driven by higher production on key platforms, addition of new business and the acquisition of Guilford. Adjusted earnings declined 3.6% to $178.0 million or 5.8% of sales in the quarter. The year-over-year fall in earnings was due to changeovers of key program, partially offset by the increase in sales.
Revenues from Electrical Power Management Systems segment rose 19.8% to $1.0 billion due to addition of new business and higher production on key platforms. Adjusted earnings surged 71.6% to $101.4 million or 8.4% of sales in the quarter, driven by increase in sales and improved operating efficiencies.
Lear initiated an $800 million accelerated share repurchase (ASR) program and retired 11.9 million shares of its common stock in the quarter. The new share repurchase program will be completed by Mar 2014. After the completion of the program, Lear will have $750 million remaining under its existing share repurchase authorization, which will expire two years after the completion of the ASR program.
Since the initiation of the share repurchase program in early 2011, Lear repurchased 27.1 million shares of its common stock. This represented a reduction of roughly 25% of its shares since the inception of the program.
Lear had cash and cash equivalents of $841.1 million as of Jun 29, 2013, down from $1.4 billion as of Dec 31, 2012. Long-term debt rose to $1.06 billion as of Jun 29, 2013 compared with $626.3 million as of Dec 31, 2012.
In the first six months of 2013, cash flow from operating activities soared 66.1% to $265.4 million from $159.8 million in the same period of 2012. Capital expenditure (adjusted) increased 24.7% to $219.3 million compared with $175.9 million a year ago. These led to a free cash flow of $46.1 million in the 2013-first half compared with a free cash flow use of $16.1 million in the year-ago period.
In 2013, Lear anticipates revenues of $15.8 billion, up from the prior range of $15.0 to $15.5 billion. Adjusted net earnings are expected to be in the range of $440 to $475 million for the year. Adjusted capital expenditures are estimated to be $450 million for the year.
Lear anticipates industry vehicle production of 16.2 million units in North America, up 1% from the prior guidance; 19.2 million units in Europe and Africa, up 1% from the prior outlook; and 18.7 million units in China, down slightly from the prior guidance.
Lear Corporation designs, manufactures, assembles and supplies automotive seat systems, electrical distribution systems, and related components primarily to automotive original equipment manufacturers. The company sells its products chiefly in North America, South America, Europe, and Asia. The company retains a Zacks Rank #2 (Buy).
Other stocks that are also performing well in the automotive components industry include Visteon Corp. (VC), Gentex Corp. (GNTX) and American Axle & Manufacturing Holdings Inc. (AXL). Visteon and Gentex are Zacks Rank #1 (Strong Buy) stocks while American Axle & Manufacturing retains a Zacks Rank #2 (Buy).
The Ryland Group Inc.’s (RYL) adjusted net earnings of 80 cents per share in the second quarter of 2013 surpassed the Zacks Consensus Estimate of 64 cents by 25% and the year-ago earnings of 14 cents by a huge margin. The earnings upsurge was driven by top-line growth and margin expansion.
Total revenue of $493 million lagged the Zacks Consensus Estimate of $498 million by 1.0%. Reported revenues climbed 67.8% year over year, driven by better pricing power and volume growth amid improved market conditions.
Ryland Group is one of the largest homebuilders in the U.S, with operations in 14 states. Like other homebuilders such as Lennar Corporation (LEN), PulteGroup Inc. (PHM) and D.R. Horton, Inc. (DHI), Ryland has been gaining momentum from the strong recovery of the U.S. housing market. Homebuilding revenues of $478 million climbed 68.0% year over year on the back of a double-digit increase in the number of homes closed and average selling price.
Net sales orders in the quarter totaled 2,191 homes, up 56.7% from the prior-year quarter, bolstered by increased demand during the quarter. The value of net orders grew 77.9% to $676.7 million, driven by an increase in volume and the number of active selling communities. The company witnessed 24.4% year-over-year increase in active communities to 260 communities during the quarter.
Home closings were up 48.8% to 1,659 homes in the reported quarter compared with 1,115 homes in the year-ago quarter. The company intends to maintain volume growth by focusing on sales in the existing communities and by increasing community count. Average closing price increased 13.0% to $287,000 during the quarter due to favorable changes in product mix, lower incentive levels and higher pricing. The increase in average closing prices was highest in Southern California, Las Vegas, Houston and Charleston.
The quarter-end sales order backlog rose 61.0% to 3,667 homes from 2,277 homes at the end of the second quarter of 2013.
With the housing market gaining momentum, most homebuilding companies are investing in building more homes to meet the growing demand. The Ryland Group is also aggressively investing in land and development in order to build more homes. The company spent $176 million on land acquisition and $62 million on site development in the quarter.
Housing gross profit margin improved 170 basis points to 20.4% during the quarter, driven by a decline in construction costs and leverage from direct overhead expenses. Selling, general & administrative (SG&A) expenses declined 400 basis points to 12.3% of homebuilding revenues due to higher leverage resulting from revenue growth.
The company reported 34.2% increase in homebuilding pretax earnings to $43.8 million in the second quarter of 2013 attributable to higher volume, expansion of housing gross profit margin and a decline in selling, general and administrative expense ratio.
Financial services reported 63.0% increase in revenues to $15.0 million in the quarter. The segment reported 162.1% increase in pretax earnings to $7.6 million due to increase in the locked loan pipeline, higher origination volume and increased title income.
Fiscal 2013 Outlook
The company expects further expansion in gross margin in the upcoming quarters on the back of declining lumber prices. The company expects total land expenditure to exceed $700 million for full year 2013. The company expects to end the fiscal year with 25% more communities compared to the prior year.
Ryland Group carries a Zacks Rank #1 (Strong Buy).
Roper Industries Inc. (ROP) reported second-quarter 2013 non-GAAP earnings of $1.31 per share, up 13.9% from the year-ago quarter and beat the Zacks Consensus Estimate by a penny.
Roper’s non-GAAP total revenue (excluding a fair value adjustment to acquired deferred revenues and adjustments related to the MHA acquisition) increased 11.0% year over year to $804.9 million in the quarter. Revenues missed the Zacks Consensus Estimate of $812.0 million.
On a GAAP basis, Roper reported revenues of $784.0 million, up 8.2% from the year-ago quarter. Acquisitions and divestitures accounted for 11.0% of the revenue growth in the quarter. Organic revenues increased 1.0% and the company reported a backlog of $1.03 billion.
Growth across most of its business segments also contributed to the year-over-year increase in revenues. Revenues from Medical & Scientific Imaging and RF Technology increased 37.8% and 3.7%, respectively. The strength in these segments more than offset the 3.1% decline in revenues from Industrial Technology. Energy Systems & Controls segment reported a modest 0.4% growth on a year-over-year basis.
Adjusted gross profit increased 17.3% year over year to $466.5 million. Gross margin in the reported quarter increased to 58.0% from 54.9% in the year-ago quarter, primarily driven by better mix and higher revenues.
Adjusted income from operations increased 17.3% year over year to $209.8 million. The upside in operating income was based on improved sales. Operating margin improved from 24.7% to 26.1% on a year-over-year basis. Adjusted net earnings increased 14.0% from the year-ago quarter to $130.9 million.
Roper exited the quarter with $374.6 million in cash and cash equivalents and total debt of $2.76 billion (including the current portion) compared with $430.0 million in cash and cash equivalents and total debt of $1.92 billion (including the current portion) in the previous quarter. Roper reported free cash flow of $129.1 million at the end of the second quarter.
Roper revised its fiscal 2013 earnings outlook from $5.76-$5.94 per share to $5.72-$5.86 per share. The company also projected that its sales will increase in the range of 12%-14%, including organic growth of 6% to 8%, for the rest of 2013. Roper expects operating cash flow to exceed $800 million in fiscal 2013.
We believe that strong backlog coupled with robust organic growth will drive earnings growth. Moreover, accretive acquisitions will expand its product portfolio, providing a significant competitive edge over its peers.
Currently, Roper has a Zacks Rank #3 (Hold).
Methanex Corporation (MEOH) posted earnings of 56 cents per share in the second quarter of 2013, up 12% from earnings of 50 cents per share recorded in the year-ago quarter.
Barring one-time items other than stock-option expenses, the company’s net earnings of 94 cents per share missed the Zacks Consensus Estimate of 95 cents.
Methanex’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) amounted to $157 million in the quarter, a year over year jump of 39%. Higher methanol pricing contributed to the increase
Revenues increased roughly 19% year over year to $733 million and exceeded the Zacks Consensus Estimate of $717 million. Sales volumes in the quarter totaled 2,012,000 tons, up 9% from the year-ago quarter.
Average realized price per ton amounted to $425 in the quarter compared with $384 a year ago. Total production in the quarter was 1,035,000 tons compared with 1,034,000 tons in the prior-year quarter. Methanex-produced methanol sales volume was 1,021,000 tons versus 1,001,000 tons a year ago.
Chile: Methanex produced 12,000 tons in Chile in the reported quarter, compared with 82,000 tons in the prior-year quarter. Methanex produced an additional 18,000 tons under another natural gas receiving arrangement from Argentina in the quarter.
The gas supply outlook in Chile and Argentina are challenging as a result of which Methanex idled its Chile operations in Apr 2013. Methanex is continuing to work with Empresa Nacional del Petroleo (ENAP) and others to secure sufficient natural gas to sustain its operations.
The availability of natural gas supplies from Chile and Argentina, level of exploration and development in southern Chile are instrumental in determining the future of Chile operations.
New Zealand: Methanex produced 361,000 tons in the quarter, much higher than 210,000 tons produced in the same period last year. During the quarter, the company contracted additional natural gas in New Zealand and produced about 600,000 tons of methanol.
Methanex is planning to restart its Waitara Valley plant and de-bottlenecking the Motunui facilities, which could produce to the site’s full capacity of 2.4 million tons annually by the end of 2013.
Trinidad: Methanex owns two facilities in Trinidad. The company’s fully-owned Titan facility produced 169,000 tons in the second quarter, lower than 196,000 tons produced in the year-ago quarter, mainly due to unplanned outages.
The Atlas facility, in which the company holds a 63.1% interest, produced 201,000 tons in the quarter, lower than 264,000 tons produced last year. Methanex is facing natural gas supply restrictions in Trinidad. Although it is trying to find a solution to this problem, Methanex expects to experience natural gas curtailments in the near term.
Egypt: The facility produced 163,000 tons in the quarter, down from 164,000 tons produced a year ago. The decline in production was a result of natural gas supply restrictions.
The company faced periodic natural gas shortages in this region, which are expected to persist in the future due to increased electricity demand during the summer.
Medicine Hat: The facility produced 129,000 tons in the quarter, up from 118,000 tons produced last year owing to the age of its catalyst and the composition of the natural gas feedstock. Methanex is currently de-bottlenecking the facility to add another 90,000 tons of annual production capacity to Medicine Hat operation by the end of the third quarter of 2013.
Consolidated cash flows from operating activities decreased 10.7% to $125 million in the second quarter from $140 million in the prior-year quarter. Methanex ended the quarter with a strong liquidity position with cash and cash equivalents of $708.5 million, up 13.7% year over year. Long-term debt, as of Jun 30, 2013, was $1,146.1 million compared with $873.6 million, as of Jun, 30, 2012.
Methanex expects the methanol industry and methanol pricing environment to be stable in the short term.
Methanex stated that methanol price will depend on a number of factors such as economic health, operating rates, global energy prices and demand. Methanex believes that its healthy financial position, strong global supply network and competitive-cost position will strengthen its position as the global leader in the methanol industry and enable it to continue to deliver incremental returns to shareholders.
Methanex further expects to start a 0.7 million ton plant in Azerbaijan and restart a 0.8 million ton plant in Channelview, Texas., in 2013. Methanex will also be relocating two idle facilities presently in Chile to Geismar, La., with the first 1 million ton facility expected to start by the end of 2014 and the second 1 million ton facility expected to start in early 2016. The company expects that its projects will expand its annual operating capacity by approximately three million tons over the next three years, representing a 60% capacity increase.
With the continued initiatives to increase production in Medicine Hat and New Zealand and progress in the Louisiana project, the company has the potential to increase its operating capacity and pursue other strategic growth opportunities over the next few years, which in turn, will contribute to cash generation and increased supply to customers. The projects are expected to add up to one million ton of annual production capacity by the end of 2013.
Methanex currently retains a Zacks Rank #3 (Hold).
Other companies in the chemical space that are worth considering include PPG Industries Inc. (PPG), Cytec Industries Inc. (CYT) and Cabot Corporation (CBT). All of them retain a Zacks Rank #2 (Buy).
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