Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty chemicals maker KMG Chemicals
With that in mind, let's take a closer look at KMG's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Houston (1992)|
|Market Cap||$191.3 million|
|Trailing-12-Month Revenue||$221.3 million|
CEO J. Neal Butler (since 2007)
CFO John Sobchak (since 2001)
|Return on Equity (Average, Past 3 Years)||15.2%|
|Cash/Debt||$4.74 million / $54.3 million|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
Late last month, useless33 helped bring KMG to our community's attention:
Treatment of railroad ties and telephone poles ... It doesn't get much less exciting, but the numbers are compelling, the product must be bought, or a further premium paid to upgrade to cement or other materials. ... Creosote is boring, but not many other folks make it.
KMG's stable business model, solid financials, and cheapish valuation continue to fuel its five-star CAPS rating. Currently, KMG even trades at a forward P/E (10.2) discount to listed rivals Honeywell (14.3) and OM Group (13.4), as well as chemical giants like Dow Chemical
CAPS member dumberthanafool expands on the bull case:
This is a well-run American company with mild but growing international exposure. It competes successfully against much larger companies. It will benefit should growth accelerate. ...
Gross Margin remains high, in mid-thirties. Operating margin stable in low teens after dip in 2008. Net income up 5x in ten years. EPS up nearly 4x in ten years. [Return on Equity] is now in high teens, though juiced by debt issuance, and that will drop. Generally stable [Return on Invested Capital], though not super high.
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