Minerals Technologies Upped to Strong Buy - Analyst Blog

Zacks Investment Research upgraded Minerals Technologies Inc. MTX to a Zacks Rank #1 (Strong Buy) on Jun 12, 2014. Going by the Zacks model, companies holding a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

A series of events in the past few months lifted sentiments for Minerals Technologies, with its share price rising roughly 5.6% year-to-date. Recently, the company signed an agreement to build a satellite, precipitated calcium carbonate plant for coated packaging paper in China. The company expects this transaction to help it expand its operations in China.

Also, in May 2014, Minerals Technologies acquired AMCOL International Corporation for $45.75 per share in cash. The combined entity is anticipated to emerge as a strong player in the bentonite and precipitated calcium carbonate market.

Further, the company reported impressive results for first-quarter 2014 on Apr 24. Earnings came in at 58 cents per share, reflecting an increase of 5% year over year and above the Zacks Consensus Estimate of 57 cents. Revenues decreased 2% year over year, while cost of sales was down 3%.

Over the past 60 days, the Zacks Consensus Estimate for Minerals Technologies has gone up by 8.0% to $2.85 for 2014 and 11.0% to $3.34 for 2015. These consensus estimates represent year-over-year growth rates of 17.8% for 2014 and 17.1% for 2015.

Increased earnings estimates as well as a positive average earnings surprise of 4.3%, have made investors hopeful of another quarter of upbeat result from Minerals Technologies. Currently, the company has an Earnings ESP of +10.5% for second-quarter 2014, +21.1% for 2014 and +28.7% for 2015.

Other Stocks to Consider

Minerals Technologies has a $2.1 billion market capitalization. Other companies worth considering in the industry include International Flavors & Fragrances Inc. IFF, KMG Chemicals Inc. KMG and NL Industries Inc. NL. All these stocks hold a Zacks Rank #2 (Buy).