FC Stone Group, Inc. (FCSX) is fresh off the heels of a very solid second quarter in which its income more than doubled from the same period last year. The company noted that it is benefiting from increased market volatility, as its customers leverage FC Stone's market risk applications to drive profits. FC Stone's stock price has been trading in a very tight channel for the last two months.
FC Stone Group, Inc. is a commodity risk services company that provides risk management and execution tools to commercial customers. The company was founded in 1968 and is headquartered in Kansas City, Missouri.
A Strong Quarter
FC Stone has been cashing in on the increased volume and volatility in the agriculture markets, as seen by the company's impressive second-quarter results, reported on April 10.
Revenue came in at $91.2 million, a 52% increase from the same period last year. Net income more than doubled, jumping to $17.8 million from $7 million last year. This produced earnings of 61 cents per share, far ahead of analyst estimates of 37 cents.
A Pattern of Beating Estimates
FC Stone has been on a roll over the last four quarters, having beaten analyst estimates by an average of 12 cents, or 36.22%.
The company noted that it experienced higher volumes in both its exchange traded and OTC (over-the counter) businesses.
Pete Anderson, President and Chief Executive Officer of FC Stone, said:
This growth across all market segments of the company is being driven by unprecedented volatility in virtually every commodity and financial market around the world. During a period of tightening credit access, this has fostered an atmosphere which has increased the necessity to manage volatility through conservative risk management services, products, platforms and structures offered by FCStone.
The analyst community is bullish on FC Stone, with the current-year estimate advancing to $1.97 per share from $1.68 per share 60 days ago.
Shares of FCSX have been locked into a very tight channel for the last two months, oscillating between $36 and $42. This is fairly unusual behavior for this stock from a historical perspective. Based upon the company's growth in earnings, its share price should eventually advance beyond the confines of this channel and accelerate into higher territory. Take a look at the chart below.