Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese coal-based chemical maker ShengdaTech (Nasdaq: SDTH ) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.
With that in mind, let's take a closer look at ShengdaTech's business, and see what CAPS investors are saying about the stock right now.
ShengdaTech facts
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Headquarters (Founded)
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Tai’an City, China (2005)
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Market Cap
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$448.25 million
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Industry
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Specialty Chemicals
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TTM Revenue
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$124.19 million
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Management
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CEO Xiangzhi Chen (since 2006)
CFO Anhui Guo (since 2006)
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Return on Equity (average last two years)
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37.35%
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Competitors
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LSB Industries (AMEX: LXU )
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CAPS members bullish on SDTH also bullish on
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Aluminum Corp. of China (NYSE: ACH )
Vale (NYSE: RIO )
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CAPS members bearish on SDTH also bearish on
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iMergent (AMEX: IIG )
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Sources: Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 156 of the 157 the All-Star members who have rated ShengdaTech -- some 99% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include jsbradley123 and TheGreatFoolish1, both of whom are ranked in the top 15% of our community.
In December, jsbradley123 listed a few of the stock's bullish points: "Growing NPCC (nano percipitated calcium carbonate) production capacity, stable cash flow from the chemicals segment, overwhelming market share in a market that is growing exponentially, relatively low earnings multiples with a solid growth rate."
A more recent pitch by TheGreatFoolish1 last month follows that bullish line of thinking, recapping some of Shengda's latest analyst-topping results:
[T]hey just smashed earnings, made a nice acquisition that should compliment their cash cow chemical business, and they are continuing to grow their NPCC output nicely. I think this is a great small cap that will continue to move up for an extended period of time. They just had earnings of .18 a share vs. estimates of .145 due to starting production on the 60,000 tons of npcc they just built, but the production was not 100% during the quarter. They are now at 100%, so i suspect that next quarter should be even better, which would include another large beat of the current estimate at .15. I predict this will hit last years highs by the end of the year.
What do you think about ShengdaTech, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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