Energy prices have been skyrocketing, driven by the tight global supply with continued sanctions on Russia and surging worldwide demand. This bodes well for oil and gas producers.
UBS raised its Brent price forecast earlier this month. “Low oil inventories, dwindling spare capacity, and the risk of supply growth lagging demand growth over the coming months have prompted us to raise our oil price forecast,” the bank said.
This year, the energy sector has attracted massive investors’ attention, shooting energy stocks to the moon. However, several non-energy stocks have gained impressive momentum, which they could sustain, given their fundamental strength.
Kronos Worldwide, Inc. (KRO) and Sanderson Farms, Inc. (SAFM) are two such non-energy stocks pushing up against their 52-week highs. So, these stocks could be good additions to one’s watchlist.
Kronos Worldwide, Inc. (KRO)
KRO produces and markets titanium dioxide pigments (TiO2) in North America and internationally. The company also provides technical services for its products.
KRO’s net sales increased 21.1% from the prior-year quarter to $562.90 million for the quarter ended March 31, 2022. Its gross margin for the quarter came in at 149.30 million, reflecting an increase of 56% year-over-year, while its net income stood at $57.50 million, up 193.4% from the prior-year quarter.
The company’s net income per share for the same quarter came in at $0.50, up 194.1% year-over-over.
Analysts expect KRO’s revenue for the fiscal quarter ending June 2022 to come in at $542 million, indicating an increase of 13.3% year-over-year. Also, the company’s EPS is expected to grow 118.2% year-over-year to $0.48 in the same period. The company surpassed the consensus EPS estimates in three of the trailing four quarters.
KRO’s shares have gained 39.7% over the past nine months and 19.6% year-to-date to close the last trading session at $17.95. KRO is currently trading 9.3% below its 52-week high of $19.78.
KRO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
KRO has a B grade in Growth, Stability, Value, and Sentiment. It is ranked #3 of 92 stocks in the A-rated Chemicals industry.
Beyond what is stated above, we’ve also rated KRO for Momentum and Quality. Get all the KRO ratings here.
Sanderson Farms, Inc. (SAFM)
SAFM is an integrated poultry processing company that produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States.
SAFM’s net sales increased 35.8% year-over-year to $1.54 billion in the fiscal quarter ended April 30, 2022. Its operating income grew 230.1% from the year-ago value to $421.49 million, while its net income improved 231.4% year-over-year to 321.19 million. The company’s EPS increased 231.6% from its year-ago value to $14.39.
The consensus EPS estimate of $13.78 for the fiscal quarter ending July 2022 represents an 86.7% improvement year-over-year. The consensus revenue estimate of $1.77 billion for the same quarter represents a 30.8% increase from the same period last year. SAFM also beat the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 29.7% over the past year and 9% year-to-date to close the last trading session at $208.31. SAFM is trading just 0.9% below its 52-week high of $210.22.
It is no surprise that SAFM has an overall rating of A, equating to Strong Buy in our POWR Ratings system.
SAFM also has an A grade in Growth and Quality and a B in Value. Out of the 86 stocks in the B-rated Food Makers industry, SAFM is ranked #4.
In addition to the POWR Ratings grades I’ve just highlighted, you can see the SAFM’s ratings for Momentum, Stability, and Sentiment here.
KRO shares were trading at $17.95 per share on Monday morning, down $0.21 (-1.16%). Year-to-date, KRO has gained 22.34%, versus a -22.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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