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What: Shares of LSB Industries
So what: For the quarter, LSB dazzled analysts with a profit of $0.61 on a 7% rise in revenue to $190 million. These results easily sailed past Wall Street's expectations for $187 million in sales and a profit of $0.48. Despite its Pryor chemical plant suffering through down time, and the construction industry not being very conducive to strong geothermal pump sales, LSB commented that it sees robust growth prospects in both segments throughout the remainder of the year, which will be aided by low natural gas prices (benefiting its chemicals segment serving the agricultural industry) and new geothermal products.
Now what: You know me, I'm very skeptical when it comes to anything related to the homebuilding industry. But, in this case I'm all optimistic. LSB Industries has extremely stable cash flow from its chemical business and is trading at just seven times forward earnings -- a discount to its historical average. If it can indeed capitalize on its new technologies as well as low material prices, then margins should improve and growth could reaccelerate. I could see LSB going much higher than its current levels.
Craving more input? Start by adding LSB Industries to your free and personalized watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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