What happened

Shares of Darling Ingredients (NYSE:DAR) rose 13.2% in May, according to data provided by S&P Global Market Intelligence. That handily outpaced the S&P 500 index's 4.5% gain for the month, but the organic ingredients manufacturer's shares are still down about 8% year to date.

So what

Darling Ingredients takes used animal products like restaurant grease and used frying oil, bakery scraps, and other... ahem...more unsavory bits and pieces, and refines them into usable ingredients for use in feed, soap, and even biodiesel, through a joint venture with Valero called Diamond Green Diesel. 

French fries cooking in an industrial deep fryer.

Image source: Getty Images.

Of course, Darling's stock was hit hard by the coronavirus pandemic and subsequent stay-at-home orders. With many restaurants closed and most others operating at reduced capacity, its restaurant operations were curtailed. With traditional petroleum fuel prices low and travel restrictions in effect, its biodiesel business was also expected to suffer. 

But Darling surprised Wall Street with better-than-expected performance in the first quarter of 2020. Revenue and per-share earnings beat both analysts' expectations and Q1 2019's results. As restaurants began to reopen and travel began to resume, the market continued to bid up Darling's shares.

Now what

With state economies beginning to open, including many restaurants, Wall Street is hoping that any potential impact on Darling's operations is in the rearview mirror. While it's still not clear whether that's actually the case, Darling certainly seems poised for long-term growth in its biofuels business

Although its shares have largely bounced back from their March lows, the company is trading at just 11.4 times earnings, near the low end of its 10-year range. Darling is definitely worth a closer look for long-term investors. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.