Focusing primarily on stocks that are slated for growth is a method many investors rely upon for achieving financial gains. Today we focused on growth opportunities in the basic materials sector. We developed a list of stocks with growth projections for the coming year that range from impressive to extraordinary. In addition, industry analysts have given recent 'Strong Buy' ratings to these stocks. We think you will enjoy comparing the companies against one another and making your own conclusions as to where to apply further research.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The one-year expected EPS growth rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for basic materials stocks. From here, we then looked for companies that analysts rate as "Strong Buy" (mean recommendation < 2). We then screened for businesses that are considered high-growth, with 1-year projected EPS growth above 25%. We did not screen out any market caps.
Do you think these stocks are at too low of valuations, given their fundamentals? Use this list as a starting-off point for your own analysis.
1) Arabian American Development Company (ARSD)
|Industry||Chemicals - Major Diversified|
|1-Year Projected Earnings Per Share Growth Rate||48.33%|
Arabian American Development Company, through its subsidiaries, owns and operates a petrochemical facility located in southeast Texas, which specializes in high purity petrochemical solvents and other solvent type manufacturing. The company, through its 37% interest in Al Masane Al Kobra Mining Company, owns and develops mining assets for copper, zinc, gold, and silver in Najran province in southwestern Saudi Arabia. Arabian American Development Company was founded in 1967 and is based in Sugar Land, Texas.
2) Saratoga Resources Inc. (NYSEMKT:SARA)
|Industry||Independent Oil & Gas|
|1-Year Projected Earnings Per Share Growth Rate||40.79%|
Saratoga Resources, Inc., an independent oil and natural gas company, engaged in the acquisition, exploitation, development, and production of crude oil and natural gas properties in the United States. The company's properties cover approximately 32,185 gross/net acres in shallow waters on parish and state leases in south Louisiana. As of December 31, 2011, its total proved reserves were 19.0 million barrels of crude oil equivalent consisting of 8.0 million barrels of oil; and 66.0 billion cubic feet of natural gas. The company also had probable reserves of 12.9 million barrels of crude oil equivalent, consisting of 4.0 million barrels of oil and 53.2 billion cubic feet of natural gas. Saratoga Resources, Inc. was founded in 1990 and is based in Houston, Texas.
3) Gevo, Inc. (NASDAQ:GEVO)
|Industry||Chemicals - Major Diversified|
|1-Year Projected Earnings Per Share Growth Rate||38.30%|
Gevo, Inc., a development stage renewable chemicals and biofuels company, focuses on the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. The company develops Gevo Integrated Fermentation Technology, an integrated technology platform for the production and separation of isobutanol. Isobutanol is a four carbon alcohol for use as a specialty chemical or a value-added fuel blendstock, as well as could be converted into butenes, which are primary hydrocarbon building blocks used in the production of lubricants, rubber, plastics, fibers, other polymers, and hydrocarbon fuels. It also produces and sells ethanol and related products. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was founded in 2005 and is headquartered in Englewood, Colorado.
4) Synergy Resources Corporation (SYRG)
|Industry||Oil & Gas Equipment & Services|
|1-Year Projected Earnings Per Share Growth Rate||67.86%|
Synergy Resources Corporation engages in the acquisition, exploitation, exploration, development, and production of oil and natural gas properties primarily located in the Wattenberg field in Denver-Julesburg Basin in northeast Colorado. As of August 31, 2011, its estimated net proved oil and gas reserves included 2.069 million barrels of oil and condensate, and 14.3 billion cubic feet of natural gas; and it operated 95 wells and had an ownership interest in 103 net wells. The company was founded in 2007 and is based in Platteville, Colorado.
5) Magnum Hunter Resources Corp. (MHR)
|Industry||Oil & Gas Drilling & Exploration|
|1-Year Projected Earnings Per Share Growth Rate||230.80%|
Magnum Hunter Resources Corporation, an independent oil and gas company, engages in the acquisition, exploration, exploitation, development, and production of crude oil, natural gas, and natural gas liquids primarily in West Virginia, Ohio, Texas, Kentucky, and North Dakota, as well as in Saskatchewan, Canada. As of February 27, 2012, the company owned approximately 560,072 net acres, with 170,000 net acres in its core resource areas, including approximately 58,426 net acres in the Marcellus Shale; 61,151 net acres in the Utica Shale; 24,000 net acres in the Eagle Ford Shale; and 75,814 net acres in the Williston Basin.
It also had working interest in 15 fields located in the Williston Basin in North Dakota comprising 151 wells and approximately 6,540 net acres, as well as operated 33 vertical and 16 horizontal Marcellus Shale wells. In addition, the company owns property interests in approximately 2,000 operated wells and 87,000 net mineral acres located in the states of Kentucky, Ohio, and West Virginia; a natural gas pipeline; 2 commercial salt water disposal facilities; 3 drilling rigs; workover rigs; and other oilfield equipment. As of December 31, 2011, its proved reserves comprised 44.9 million barrels of crude oil equivalent. The company was formerly known as Petro Resources Corporation and changed its name to Magnum Hunter Resources Corporation in July 2009. Magnum Hunter Resources Corporation was incorporated in 1997 is headquartered in Houston, Texas.
6) KMG Chemicals Inc. (NYSE:KMG)
|1-Year Projected Earnings Per Share Growth Rate||29.13%|
KMG Chemicals, Inc., through its subsidiaries, engages in the manufacture, formulation, and distribution of specialty chemicals in the United States and internationally. The company offers electronic chemicals that include high purity wet process chemicals, such as sulfuric, phosphoric, nitric, and hydrofluoric acids; and ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, and various blends of chemicals that are used to clean and etch silicon wafers in the production of semiconductors.
It also provides wood treating chemicals, including penta blocks, flakes, and solutions, as well as a byproduct of penta production that are used primarily to treat electric and telephone utility poles, protecting them from mold, mildew, fungus, and insects; and creosote products, which are used as wood preservatives for railroad crossties and utility poles. The company markets its animal health products under the trade names of Zymace, Lactomace, Protomace, Proxitane, Avenger, Rabon, Ravap, Patriot, and Annihilator. KMG Chemicals, Inc. was founded in 1992 and is based in Houston, Texas.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on August 23, 2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.