LRT Capital: “Stepan (SCL)’s Shares are Very Attractive at 23.31x Trailing and 18.06x Forward Earnings”

LRT Capital Management, in its Q1 2021 investor letter, mentioned Stepan Company (NYSE: SCL), and shared their insights on the company. Stepan Company is a Northfield, Illinois-based chemical manufacturing company that currently has a $3.03 billion market capitalization. Since the beginning of the year, SCL delivered a 12.86% return, extending its 12-month returns to 38.60%. As of May 28, 2021, the stock closed at $134.66 per share.

Here is what LRT Capital Management has to say about Stepan Company in its Q1 2021 investor letter:

Stepan is a less well-known company with a market cap of $2.7b10, focused on the manufacturing of specialty chemicals, primarily for the cleaning industry. Their chemicals are used as inputs into a variety of products such as shampoos and body washes. What is most interesting about the company is their specialty segment which holds the highest margin products, and which is growing as a share of the company’s total sales. The impact of this growth can be seen in the company’s steadily improving margins. Stepan reported Q4 2020 earnings on February 18th, beating both top (Q4 EPS of $1.42 v $1.08 expected) and bottom line expectations (+11.2% YoY). The company’s shares are very attractive at 23.31x trailing and 18.06x forward earnings. Shares are up 8.81% year-to-date.”


Our calculations show that Stepan Company (NYSE: SCL) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Stepan Company was in 10 hedge fund portfolios, compared to 12 funds in the fourth quarter of 2020. SCL delivered an 11.58% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.