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Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
Colorado-based Innospec Inc. makes fuel additives, oilfield chemicals, personal care and fragrance ingredients, and other specialty chemicals. It has a market cap of $1-billion (U.S.).
The company has a 21-per-cent return on equity, vs. 10 per cent for the chemical manufacturing industry. It has $253-billion in net current assets vs. $135-billion in long term debt, which the Benjamin Graham-based approach likes. The Graham approach also likes its 2.3 current ratio.
Innospec gets strong interest from the James O'Shaughnessy-based growth model, which likes its solid 67 12-month relative strength and cheap 1.0 price/sales ratio.
It has grown EPS at a 18-per-cent clip over the long term (using avg of 3, 4, and 5 yr EPS growth rates), part of why it gets some interest from Peter Lynch model. The Lynch model also likes its 0.49 P/E-to-growth ratio.
Innospec has a 1.4-per-cent dividend. It trades for 9 times trailing 12-month EPS and a still-reasonable 15 times projected EPS. And it has a reasonable 23-per-cent debt/equity ratio.
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