Currently trading at 14.6 times its earnings, packing a 54% discount to the industry average, and a price tag close to its 52-week low, the stock appears undervalued. It is recommended to HOLD until Tetra Tech, Inc. (NASDAQ:TTEK) reduces its debt level and growth perspectives are well founded.
Cleaning with carbon
Born as a steel company, today Calgon Carbon Corporation (NYSE:CCC) is a company dedicated to the production of carbon-based filtering devices for liquids and gas. Operations are divided among four segments: activated carbon, service, engineered solutions, and consumer health. Most recently, analysts have taken different perspectives over the last report.
Now, Calgon Carbon Corporation (NYSE:CCC) is placing attention on unfavorable foreign currency exchange, cost cutting polices, and soon to expire supply contracts for bituminous. Later, the firm will solidify Asian operations, focus on mercury removal, increase heavy water treatment, and improve facility processing. Future plans, and shareholder’s rewards, are said to be finance with increasing revenues from recent price hikes.
Financially, Calgon Carbon Corporation (NYSE:CCC) is improving since 2010. Free cash returned to positive levels in 2012 after two years in red. Revenues, however, have steadily increased during the last four years. But, debt has risen to a worrying level last year, putting a big dent on the financial record. Finally, operating margin took on a downtrend during the last 3-years, and stands today at 7%.
Trading at 39.4 times its earnings, carrying an 18% discount to the industry average, paying $0.03 dividends, and a price tag close to the 52-week high, the stock seems undervalued. It is recommended to HOLD because Calgon Carbon Corporation (NYSE:CCC) is financially weak at this time, associating great risks to any potential long-term investment.
Filtering thoughts
I recommend buying stock from Pall Corporation (NYSE:PLL) because the company settled its business structure before market preferences changed. Also, the firm has diversified its physical presence, and progressively improved its finances. Last, competition will put up a fight but no challenger poses a real threat.
The article Environmental Clean Stocks: Pollution Control originally appeared on Fool.com and is written by patricio kehoe.
patricio kehoe has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. patricio is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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