Clean Harbors, Inc. is cleaning up investors' portfolios. The company is increasing its incinerator capacity which should spur strong revenue growth. This year's earnings estimates have increased 15 cents to $2.67 over the past two months.
Full Analysis
Clean Harbors, Inc. (CLHB) , through its subsidiaries, provides environmental services in North America. It operates through two segments, Technical Services and Site Services. The Technical Services segment collects, transports, treats, and disposes hazardous and non-hazardous wastes for commercial and industrial customers, health care providers, educational and research organizations, and other environmental services companies and governmental entities.
It offers resource recovery and fuels blending, incineration, landfills, wastewater treatment, and explosives management services; and cleanpack services, including handling, packaging, transportation, and disposal of laboratory quantities of outdated hazardous chemicals, household hazardous wastes, and waste pesticides and herbicides. The Site Services segment provides environmental site services to maintain industrial facilities and process equipment, as well as clean up of hazardous materials to chemical, petroleum, transportation, utility, and governmental agencies.
In early-January, the shares got a boost after Wedbush Morgan Securities analyst upgraded the stock because Clean Harbors' growing incinerator capacity will increase its revenue. Analyst Al Kaschalk raised his rating on Clean Harbors shares to "Strong Buy" from "Buy," and increased his price target to $64 per share from $62. The "Strong Buy" rating means Kaschalk expects the stock to rise 20% or more in the next six to 12 months, and his price target implies 26.9% growth.
CLHB also got a boost when it released third-quarter numbers that beat expectations in early-November. The company reported third-quarter earnings of $12.9 million, or 63 cents a share, on revenue of $245.5 million. Analysts anticipated earnings of 57 cents a share and revenue of $238.5 million. For the year, Clean Harbors sees revenue growth of 12% to 13%, up from its prior guidance.
This year's earnings estimates have increased 15 cents to $2.67 over the past two months. The stock is attractively valued at 22.5x next year's estimates, slightly above its long-term growth rate of 20%. The ROE is a stellar 25%.
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Tuesday, April 15, 2008
CLHB - Clean Harbors - stock is attractively valued - ROE is a stellar 25%
CHK - Chesapeake Energy Corp - 2007 results reflected strong production gains
Chesapeake Energy Corporation (CHK) continues to trade near a 52-week high ahead of announcing first-quarter results on May 1. The company noted that 2007 results reflected strong production gains and posted fourth quarter earnings of 93 cents per share, compared to 90 cents per share in the prior-year period. The result came in 15% ahead of the consensus estimate. The Growth & Income pick has a dividend yield of 0.6%, which is higher than the industry average. CHK’s earnings per share are expected to grow 15% over the next 3 – 5 years, versus industry’s average of 13%. The company’s ROE of 18% also tops the industry’s average of 16%.
Full Analysis
Chesapeake Energy Corporation is the largest independent and third-largest overall producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions. The company is known for growth through acquisitions, and is the most active driller of new wells in the U.S.
The company scheduled the release of its first quarter results after the close of trading on May 1, 2008.
Income
In mid-March, Chesapeake Energy declared a quarterly dividend of $0.0675, which is payable on April 15, 2008 to common shareholders of record as of April 1, 2008. This Growth & Income pick has a dividend yield of 0.6%, which is higher than the industry average as oil and gas companies do not generally pay dividends.
Growth
In addition to income, the company offers both technical and fundamental growth. Shares of CHK continue to trade near a 52-week high after delivering a better-than-expected fourth quarter as well as the full year.
Chesapeake noted that 2007 results reflected strong production gains. Fourth quarter earnings totaled 93 cents per share, compared to 90 cents per share in the prior-year period. The result came in 15% ahead of the consensus estimate.
Wall Street earnings forecasts are on the rise. Full-year 2008 estimates of $3.54 per share climbed from $3.39 over the past 60 trading days. The most accurate estimate is a more bullish $3.59.
CHK’s earnings per share are expected to grow 15% over the next 3 – 5 years, versus industry’s average of 13%.
The company’s return on equity (ROE) of 18% also tops the industry’s average of 16%.
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RIO - Companhia Vale Do Rio Doce - forecasting earnings jump of 30%
Companhia Vale Do Rio Doce (RIO) shares have been advancing over the past two months on the heels of continued global steel shortages and the company's incredible pricing power. Vale was recently able to renegotiate its pricing structure with some of its major Asian and European customers, boosting its ore prices by as much as 65%.
Full Analysis
Companhia Vale Do Rio Doce is one of the worlds largest mining companies, specializing in the exploration, production and deployment of such materials as iron ore, coal and copper. The company is the worlds largest iron ore producer, was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.
Shares of RIO have been in a very nice up trend since bottoming out with the overall market on Jan 23, just below the $25 mark. Since then, shares have traded as high as $38 on the heels of shortened global steel supplies and the company's growth initiatives.
In the last five years Vale has invested $20.6 billion in acquisitions and another $20.1 billion in maintaining its operations, research and development and project executions.
These initiatives have produced record growth numbers for the company, with revenue jumping nearly 600% to $33.1 billion from 2003 to 2007. The $33.1 billion of revenue recorded in 2007 represents a 28.8% increase from 2006.
Net earnings also took a big jump forward in 2007, growing more than 62% from 2006 to $11.8 billion.
Due to continued pricing strength and very strong demand for iron ore driven steel products, Vale was able to recently renegotiate its contracts with some of its major European and Asian customers. Earlier this year Vale announced it was able to secure a 65% increase in its iron ore pricing structure.
Analyst estimates have been advancing over the past 60 days, with the current-year estimate gaining 27 cents and moving to its current projection of $3.09 per share. The next-year estimate is forecasting earnings of $4.14 per share, which would represent a very nice jump in earnings of more than 30%.
Vale is currently boasting an unbelievable profit margin of more than 35%.
As previously mentioned, shares of RIO have been in a very nice up trend over the last few months. The key to the chart in the near-term is the key level between $37 and $38. This is both the 52-week and all-time high, and has been tested numerous times. Thus far, shares have been unable to eclipse this boundary, but are once again headed in that direction. With Vale renegotiating some of its key contracts, it may provide the fundamental strength to drive shares into uncharted territory.
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OFG - Oriental Financial Group - Easily Beat Wall Street Estimates in the Fourth Quarter
Oriental Financial Group is one bank that is bucking the credit crisis trend. Based in Puerto Rico, the company has parlayed a conservative mortgage policy into profits. Oriental beat Wall Street estimates the last two quarters by an average of 51.98%. It has a 2008 P/E of 9.89.
Full Analysis
Oriental Financial Group Inc. (OFG) is a diversified financial holding company headquartered in San Juan, Puerto Rico and operating under U.S. and Puerto Rico banking laws and regulations. The company has 24 financial centers in Puerto Rico that offer services such as financial planning, trust, insurance, investment brokerage and investment banking.
OFG, a Zacks #1 Rank (Strong Buy), operates three business segments: Banking, Treasury and Financial Services. The company has been operating for 44 years and services the mid and high net worth clients in Puerto Rico, specifically those operating professional and mid-sized businesses. As of Dec 31, 2006, the company managed and owned $7.4 billion in financial assets.
On Jan 29, OFG announced it was entering into an alliance with Primerica Financial Services, a wholly owned subsidiary of Citigroup, wherein Oriental will be the supplier of a mortgage platform and other mortgage related services for Primerica in its home loan program in Puerto Rico.
Primerica has 400 full-time and 2,000 part-time financial representatives in Puerto Rico who will be using Oriental's focus on long-term, fixed-rate residential mortgages.
Who is crazy enough to expand its home mortgage business in this credit market?
Oriental has not found itself embroiled in the sub prime credit crisis. Oriental made the decision several years ago to adopt conservative lending policies as the Puerto Rico economy started to weaken.
The result is that 90% of its residential mortgage portfolio consists of fixed-rate, fully amortizing, full documentation loans. These loans are far less risky than the sub prime loans offered by many U.S. mortgage originators.
OFG's conservative approach to lending has paid off in spades. The company has never been active in the risky loan products such as negative amortization loans or adjustable rate mortgages (ARMs) with or without teaser rates. OFG also does not own or originate sub prime single-family home loans and it does not own or originate construction/development loans.
Oriental Easily Beat Wall Street Estimates in the Fourth Quarter
The company's financial strength was evident in its fourth-quarter earnings report announced on Feb 7. Oriental Financial beat Wall Street estimates by 25 cents, or 73.53%, reporting 59 cents per share compared to analysts' estimates of 34 cents per share.
OFG bounced back from a loss in the year ago period reporting income of $14.2 million compared to a loss of $19.3 million in fourth-quarter 2006. For the year, Oriental reported income of $36.5 million, or $1.50 per common share, compared to a loss of $9.9 million, or ($0.40) per share, in 2006.
"Oriental remains very well positioned, and we expect to continue to benefit from these strategies in 2008. With our strong capital structure, we also believe we will be able to take advantage of any good quality strategic growth opportunities that may arise," said José Rafael Fernández, President and Chief Executive Officer.
Brokerage analysts are bullish on the company and have been raising estimates over the last 90 days for the first quarter and the full year. Consensus estimates for the first quarter rose five cents to 43 cents from 38 cents per share. For the full year, estimates are up 46 cents to $1.97 from $1.51 per share.
Analysts are also forecasting healthy 2008 earnings growth of 11.5%.
OFG has a 2008 P/E of 9.89, under the industry average of 13.8. Its price-to-book is 1.61. The company has an outstanding five year average return on equity of 18.84%. It also pays a dividend yield of 2.92%.
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