Why Cytec Industries' Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of specialty chemicals company Cytec Industries (NYSE: CYT  ) rose 11% at the open of trading after the company gave a preview of its second-quarter numbers.

So what: Management said second-quarter adjusted earnings per share would be between $1.50 and $1.55 per share, well outpacing analyst estimates of $1.05. Strong earnings in the coating resins and process separation business drove the better-than-expected results.

Now what: The irony is that Cytec is trying to sell the business that has performed so well in the quarter. But this may give buyers a greater incentive to bid on the deal and even push the price higher. Either way, I think shares are trading at an attractive level for investors. The company's forward P/E ratio is 12.3, and those estimates should be moved higher after this announcement is factored in, providing a catalyst to push shares higher.

Interested in more info on Cytec Industries? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.  Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1943419, ~/Articles/ArticleHandler.aspx, 4/24/2014 12:52:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement