Posted by on July 30, 2017 3:46 PM
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Categories: Stocks To Watch

Ferro Corporation Stock continues in a strong uptrend that’s only about -6% from its 52 week high. The rising large players volume shows big players are accumulating the stock on pullbacks.

Ferro Corporation News

On July 26, 2017, Ferro Corp. reported second-quarter net income of $21 million. Adjusted EPS came in at $0.37 which beat the consensus of $0.33 per share. The specialty chemicals maker posted revenue of $348.6 million in the period.

Net sales increased 17% to $348.6 million and organic sales rose 6.5% on a constant currency basis. Total volume grew 11.6% and organic volume grew 8.2%

Peter Thomas, Chairman, President and CEO, said, “We’ve spent the last few years purposefully developing a growth-oriented culture. Our results over the last few quarters are strong validation that our work is paying off, with market-beating organic growth and strong financial performance. In fact, this was our fourth consecutive quarter of strong sales and earnings growth. We did experience raw material price headwinds in the second quarter, as we anticipated, but our team was able to achieve margins within our expectations through a combination of pricing and optimization actions.”

Ferro Corporation Stock

FOE is a good setup IMO. The chart shows a strong uptrend line in a continuation pattern. The Effective Volume study shows large players volume exploding higher. There is a recent pocket pivot signal (blue dot) which is bullish.

There is a resistance zone just above the current price starting at 19.04. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 18.82, a stop order could be placed below this zone.

What do you think about Ferro Corporation stock? Leave your comments below.

Ferro Corporation Review
  • Profitability (Return On Assets, Return On Equity, and Profit Margin)
  • Valuation (P/E, Forward P/E, PEG, Book Value, Price to Book Ratio)
  • Growth (EPS and Revenue)
  • Health (Current Ratio, Quick Ratio, Debt to Equity, Altman-Z Score)
2.0

Summary

Profitability

FOE has a Return On Equity of 35.05%. This is better than the industry average of 29.47%. FOE's Return On Asserts of 7.69% is inline with the rest of the industry. The industry average Return On Assets is 7.69%. FOE's Profit Margin of 109.86% is worse than the rest of the industry. The industry average Profit Margin is 144.06%.

Valuation

The Forward Price/Earnings Ratio of 15.47 indicates a correct valuation of FOE. FOE is trading at 5.56 times its book value. The Price/Earnings Ratio is 126.87, which means FOE is expensive. With a Price/Earning Ratio of 126.87, FOE is valued higher than the industry average, which is at 118.44. 100% of the companies listed in the same industry are cheaper than FOE! The high PEG Ratio, which compensates the Price/Earnings for growth, indicates FOE does not grow enough to justify the current Price/Earnings ratio. Compared to an average industry price book ratio of 5.56, FOE is valuated more expensive than its industry peers.

Growth

The Earnings Per Share has grown by an impressive 23.23% over the past year. The Earnings Per Share has been growing by 10.70% on average over the past 5 years. This is quite good. Based on estimates for the next 2 years, FOE will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.52% on average per year. Measured over the past 5 years, FOE shows a decrease in Revenue. The Revenue has been decreasing by -9.37% on average per year. When comparing the growth rate of the last year to the growth rate of the upcoming 2 years, we see that the growth is decreasing.

Health

A Current Ratio of 2.56 indicates that FOE has no problem at all paying its short term obligations. FOE is better placed than average in its industry to meet its short term obligations. Its Current Ratio is much better than the industry average of 2.27. FOE has a Quick Ratio of 1.61. This is a normal value and indicates that FOE is financially healthy and should not expect problems in meeting its short term obligations. FOE has a Quick Ratio comparable to the industry average, which is at 1.61. An Altman-Z score of 2.17 is not a great score, but indicates only limited risk for bankruptcy at the moment. When comparing the Debt to Equity Ratio of FOE to the average industry Debt to Equity Ratio of 2.18, FOE required more debt to finance its operations than its industry peers. When comparing the Altman-Z score of FOE to the average industry Altman-Z score of 2.84, FOE is less financially healthy than its industry peers.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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