Hawkins, Inc. (HWKN) | Daily Alert April 23
There have been several split announcements since the last adjustment to the index. When compared with the various splits going back a few months, none of the recent splits quite measure up. Therefore, I’m going with Hawkins, Inc.
Hawkins announced a 2 for 1 split back in January and I’ve been watching it with interest since then. A recent dip in its price makes it more attractive than it was last month. Hawkins is a company that meets all of the desirable criteria noted in the paragraph above, including an insider ownership around 9.4%.
HWKN is a small cap business based in Minnesota making and selling specialty chemicals used in industrial processes, water treatment, and food preparation. Reasonable valuation numbers, good growth over the last few years, a very dependable dividend, and a low measure of volatility all make HWKN a good fit for the 2 for 1 Index.
Neil Macneale, 2 for 1 Stock Split Newsletter, 2-for-1.com, 408-210-6881, April 2021
Nutrien Ltd. (NTR, NTR.TO) | Daily Alert May 4
Nutrien is the world’s largest producer of agricultural fertilizers. This includes nitrogen and phosphates which it sells in bulk and at the retail level to farmers.
The Saskatchewan-based company was formed in 2018 from the merger of Agrium Corp. and Potash Corp. This network dominates in North America and Australia and is expanding in Latin America. The merger provided a way to compete with large producers in Belarus and Russia.
In its latest quarter, sales of $4.05 billion were 17% higher than a year earlier. Net earnings of $316 million or $0.55 cents per share compared with a loss of $48 million (-$0.08 per share) in the prior year. Note that the company reports in U.S. dollars.
In February, Nutrien raised its quarterly dividend for the third time in three years to $0.46 per share (about C$0.58), up a penny. It also plans to buy back up to 5% of its shares over the next year.
Nutrien is a buy.
Adam Mayers in Gordon Pape’s Internet Wealth Builder, buildingwealth.ca, 1-888-287-8229, April 26, 2021
LCI Industries (LCII) | Daily Alert April 29
LCI Industries is a market leading maker of components used in recreational vehicles, buses, trailers, trucks, boats, trains, and manufactured housing. LCI makes all kinds of products, including windows, axles, showers and sinks, awnings, electronics, and chassis. Each new towable RV sold in the U.S. has an average of $3,390 of LCI content, while each new motorhome RV has $2,479 in LCI components on average. These numbers have increased nearly every year since 2012.
The company serves markets in North America and Europe, but is executing on a strategy to expand its sales in its Europe, International, aftermarket, and adjacent industries and thus reduce the cyclical impact of the North American RV industry. To that end, it has been acquiring businesses outside the U.S. and in its non-RV-related products, making more than 50 acquisitions in the last 20 years, most focused outside of North America.
For the full year 2020, sales were up 17.9% year compared to fiscal 2019, while EPS grew 31.1% year-over-year. These gains were largely due to increased industrywide demand for RV shipments as consumers sought alternatives for vacation and travel. Total wholesale RV shipments in 2020 were the fourth highest on record.
In mid-April, management pre-announced sales for the company’s Q1 ended March 31, 2021, reporting sales would exceed $1.0 billion, up more than 50% over Q1 2020. The estimated EPS are up more than 90% from the prior year quarter.
Analysts who follow LCI Industries are seeking 20% annual EPS growth on average in the next half-decade. We are conservatively projecting revenues to grow 12% annually, with EPS growing at 15.2% driven by an increase in margins.
The company’s stock trades at a current P/E of 19.1, below its adjusted average P/E of 16.3. At a future high P/E ratio of 22.1 and future EPS of $14.81, the stock could reach $327 from the recent price of $139.57.
Doug Gerlach, Smallcapinformer.com, 1-877-33-ICLUB, May 2021
3M Company (MMM) | Daily Alert April 27
3M is being added to the Focus List. 3M occupies an attractive position that straddles both the pandemic and post-pandemic worlds. In the past year, 3M has increased capacity for respirator masks to 2.5 billion annually, four times higher than 2019 levels.
3M also makes products for the industrials, transportation, and consumer markets, which should get a lift from an economic rebound as the pandemic subsides. The consensus calls for 10% higher earnings per share for 2021 on 7% revenue growth.
Shares trade at 20 times estimated 2021 profits, a 28% discount to the median S&P 1500 Index industrial conglomerate. 3M is also a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, April 12, 2021
H.B. Fuller Company (FUL) | Daily Alert May 12
Founded in 1887, H.B. Fuller first made adhesives for barrels, shoes, and wallpaper. Today, it’s a global leader in adhesives, sealants, and other specialty chemicals, with operations in 35 countries.
Total revenue hit $2.8 billion last year, up from about $157,000 nearly a century ago. A broad and expanding customer base spans several growing markets, including electronics, automobiles, medical, and construction materials.
H.B. Fuller is benefiting from healthy volume growth and improved profit margins. Consensus earnings estimates have risen 7% over the last 90 days, with the average projecting 25% higher per-share profits for fiscal 2021 ending November. Generous cash flow should help sustain operating momentum and reward shareholders. Trailing 12-month free cash flow increased 11% to $207 million, providing flexibility to capitalize on internal expansion and acquisitions.
Last month, the company increased its quarterly per-share dividend 3% to nearly $0.17.
The stock earns an Overall score of 89, versus the average of 56 for the 37 specialty chemical stocks in Quadrix®. The stock is being started as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, May 3, 2021
Harley-Davidson, Inc. (HOG) | Daily Alert May 13
52wk H. 50.67 52wk L. 17.80
Mkt Cap: $7.33B, EPS: 1.24, P/E:, 38.50 Beta: 1.50,
The motorcycle manufacturer’s current March quarter earnings of $1.68/shr up 200%+ surprised the analysts. Demand for motor bikes is running its factories at full capacity. Erratic chart pattern since Dec ;20. Surge in price movement appeared in its reversal in April ’20: (33-35) to (36-38), gapping up (38-40) with an upped-gap (42-44) to new high of 50.67
BUYING RANGE: 44-50
NR TERM OBJ: 61
INTERMED OBJ: 78
STOP LOSS: 38
Joseph Parnes, Shortex Market Letter, shortex.com, 800-877-6555, May 6, 2021