OUTLINE:
*Each target price is (1) computed using CGFS' proprietary valuation and simulation approach and (2) adjusted within 3 standard errors of the estimate. Assumption and computation details are inserted at the end of each write-up.
This Week's Picks:
- Our Weekly Stock Picks*
- Macro Environment
- The Bond Report, What's next, & Key Earnings
*Each target price is (1) computed using CGFS' proprietary valuation and simulation approach and (2) adjusted within 3 standard errors of the estimate. Assumption and computation details are inserted at the end of each write-up.
This Week's Picks:
- Hudson Technologies is a growth company that continues to show record revenues, increased gross margins and improved profitability for the year and have over all been outperforming its competitors.
- Management team is focused on growth potential due to phase outs of R-22 and future phase downs of HFCs which will begin in 2019. The phase out of R-22 can see HDSN become producers with 100% R-22 supply being served as by reclaimed R-22
- Management plans to continue evaluating strategic M&A opportunities that will help and support its future growth.
NUE has upward potential to capitalize on. After the recent macroeconomic events that taken place over the last few months. President Trump addressed the nation directly informing the American public on his $1 trillion infrastructure plan. Nucor Corporation is the largest steel manufacturer and supplier in the country, therefore the company is almost definitely going to benefit from this announcement. Although 2016 experienced weak earnings, the steelmaker believes 2017 will be much stronger. Favorable prices have benefited NUE coming into the new year and will continue until things change. In light of the recent domestic changes, Nucor also predicts a rise in production because of the decrease in the amount of foreign imported into the United States. In particular Nucor has had to compete with subsidized production in China. These factors can lead to an increased EBITA margins and profitability.
Is there any other company out there that would best define the notion of growth stock than Under Armour? The company is known to be one of the fastest growing company in the United States. Over the last 26 consecutive quarters (roughly 7 years) the company’s revenue growth averaged an impressive 20% on a yearly basis. Despite having only missed last quarters estimates, the stock price has been nose diving during the last three earnings releases on the back of suspicions that the company’s growth was slowing down. The questions that arises here are: Is a minor slowdown in growth and profitability justifying the massive selloff UA experienced over the last 9 months? Or is it just the market showing inefficiencies by overreacting? In which case it would imply that the current price doesn’t reveal the true market value of the firm. I strongly believe that the security is currently mispriced and it is therefore the time to seize the opportunity and purchase Under Arnour at the current price.
Trinseo S.A. has been rapidly growing since its IPO inception in 2014. Prior to its IPO, Trinseo was wholly owned by DOW Chemical Company, which gave it a great foundation. Trinseo has consistently beat earnings expectations, generated increasing cash flows from operations, and greater free cash flow. This free cash flow has been spent well from management on R&D, capital expenditures, stock buybacks, and dividends. Trinseo has been able to be highly successful in a challenging Chemical Industry environment that is highly dependent on commodity prices due to its great products. Trinseo’s products are incorporated into countless industries where there is market share to be gained. These new innovative products are able to take advantage of new trends and consumer demands. The marketing strategy of passing lower cost onto consumers with more efficient products that are environmentally conscious is a huge selling point. Even with these lower cost, Trinseo is able to operate at high profitability margins, which is impressive. Trinseo is underpriced right now compared to its competitors even considering its significant run. Trinseo is in its early growth stage and has great foundations to continue its upward movement in its stock price.