Georgia Gulf Corp. - Momentum

Georgia Gulf Corp. (GGC) is looking like quite the high flyer, recently surging to a new all-time high after reporting a hefty 975% earnings surprise. With estimates on the upswing and a bullish growth projection, this Zacks #1 stocks offers plenty of momentum.

Company Description

Georgia Gulf Corp manufactures and sells a line of specialty chemicals in the United States and Internationally. The company was founded in 1984 and has a market cap of $1.05 billion.

Although GGC has been trending higher since July, shares recently spike higher on Q4 results that came in well ahead of expectations.

Fourth-Quarter Results

Revenue was up 38% from last year to $693 million. But earnings came in through the roof at 43 cents, blowing past the Zacks Consensus Estimate of 4 cents.

The company’s largest segment, Chlorovinyls, posted an impressive gain, with sales up 34% to $320 million. But it’s largest percent gain came from its Aromatics division, with sales more than doubling to $199 million.

Financial Profile

Georgia Gulf is using its strong earnings momentum to strengthen its balance sheet, with cash and equivalents up $84 million from last year to $123 million. The company is also chipping away at its debt, with total debt down $43 million from last year to $668 million.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year adding 14 cents to $1.22. The next-year estimate is up 3 cents in the same time to $1.43, a bullish 17% growth projection.

Valuation

In light of the recent string of gains, GGC looks a bit pricey, with its forward P/E of 25X a sharp premium to the industry average of 14X.

12-Month Chart

On the chart, GGC has been hot since July, recently spiking higher to a new 52-week high on the good quarter. Look for support from the long-term trend on any weakness, take a look below.