Chicago, IL – January 16, 2024 – Zacks Equity Research shares The Andersons, Inc. ANDE as the Bull of the Day and Albemarle Corp. ALB as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Staffing 360 Solutions STAF, KornFerry International KFY and Robert Half Inc. RHI.
Here is a synopsis of all five stocks.
The Andersons, Inc. saw record third quarter 2023 results in Renewables. This Zacks Rank #1 (Strong Buy) is expected to keep its momentum into 2024, growing earnings by 32.2%.
The Andersons is an agribusiness company which has grown, over the last 77 years, from a single grain elevator to a diverse company with commodity merchandising (trade), renewables, and nutrient and industrial specialties.
It has 82 facilities in the trade division, 4 in renewables and 37 in nutrient and industrial along with 10 farm centers.
On Nov 7, 2023, The Andersons reported its third quarter results and missed on the Zacks Consensus by $0.39. Earnings were $0.13 versus the consensus of $0.52.
However, Renewables had a record quarter with great operating performance in the ethanol plants, a strong margin environment and good results from the renewable diesel feedstock merchandising team.
It also had a solid core operating performance in its Trade segment which was offset by a currency loss in the international business.
Nutrient & Industrial, which was in the typical third quarter slow season, had year-over-year improvements in both the ag and manufacturing businesses.
The Andersons has been growing through acquisitions. In the third quarter it closed on the acquisition of ACJ International, a pet food ingredient supplier. It is also actively looking to grow its Renewables business.
The Andersons ended the third quarter with $400 million in cash and very little short-term debt due to strong cash flows and reduced commodity prices. It remains well below its long-term debt to EBITDA target of less than 2.5 times.
The company is already shareholder friendly and pays a dividend, currently yielding 1.5%.
While The Andersons has yet to report its Q4 earnings, the focus has shifted to 2024.
The Andersons is lightly followed on the Street as it's a small cap with a market cap of $1.8 billion.
But 1 earnings estimate has been revised higher in the last 60 days for 2024. The Zacks Consensus has jumped to $3.86 from $3.40 during that time. That's 32% higher than 2023, wherein the company is expected to make $2.92.
Shares of The Andersons rallied big in 2023, adding 48.4% and hitting new 5-year highs. But in the last month, they have retreated off those new highs by 3.5%.
It's cheap on a P/E basis with a forward P/E of just 13.6.
For investors looking for a small cap agribusiness company for 2024, The Andersons should be on your short list.
Albemarle Corp. is growing its sales but lithium prices have depressed earnings. This Zacks Rank #5 (Strong Sell) is expected to see a double digit decline in earnings in 2024.
Albemarle is a global lithium and bromine producer. Headquartered in Charlotte, NC, it serves customers in 100 countries.
On Nov 1, 2023, Albemarle reported its third quarter results and missed on the Zacks Consensus by $0.96. Earnings were $2.74 versus the consensus of $3.70.
Lithium prices have fallen throughout the year.
Sales rose 10% to $2.3 billion due to higher volumes in the Energy Storage business.
Albemarle also signed agreements with Caterpillar to collaborate on solutions to support the full circular battery value chain and sustainable mining operations.
It also received a $90 million critical materials award from the US Department of Defense to restart the Kings Mountain, NC mine.
Albemarle also completed the previously disclosed transaction to amend and simplify the MARBL joint venture with Mineral Resources Ltd.
For the full year, the company said net sales were expected to increase 30% to 35% over the prior year, primarily driven by new mining and conversion capacity delivering 30% to 35% volumetric growth in Energy Storage.
The analysts are not bullish on Albemarle for 2024. 5 earnings estimates have been cut in the last 60 days with one being cut in even the last week. The 2024 Zacks Consensus Estimate has fallen to $12.70 from $15.10 over the last 2 months.
That's an earnings decline of 42% compared to 2023 when Albemarle is expected to make $21.82.
When lithium prices were rising, so were Albemarle shares. When they fall, so does Albemarle. The shares are down 48.1% in the last year.
They're cheap, with a forward P/E of just 9.9. Albemarle also has a PEG ratio of just 0.9. A PEG ratio under 1.0 means a company has both value and growth. That's a rare combination.
But investors might want to wait for Albemarle's earnings to turn around. That's likely to mean that lithium prices have to reverse course and move higher.
The U.S. labor market concluded last year on a solid note as the pace of hiring exceeded expectations. Job additions improved in most of the sectors in December amid a lower unemployment rate.
The Labor Department stated that employers added 216,000 new jobs last month, way more than November’s downwardly revised 173,000, and higher than economists’ projections of 170,000.
Hiring, by the way, was also revised down in October. But employers successfully added 2.7 million jobs in 2023, at an average monthly gain of 225,000. This is higher than in the years preceding the coronavirus pandemic that rattled the global economy. Thus, it can be concluded that the pace of job growth remains robust, and the labor market is resilient to any imminent recessionary threat.
December’s job growth was mostly led by the government, healthcare, and leisure and hospitality segments. The government contributed 52,000 new jobs in December, while 38,000 jobs were added in the healthcare space. The average monthly job additions in the government and healthcare spaces were more in 2023 than in the prior year.
Meanwhile, leisure and hospitality jobs gained 40,000 last month. Notably, job additions were also robust in the business services, retail and manufacturing sectors.
The unemployment rate, currently, stands at 3.7%. This is lower than the long-term average of 5.7%, a tell-tale sign that jobs are being added to the U.S. economy. What’s more, job additions are expected to pick up in the first half of 2024 as it stopped cooling last month. The Employment Trends Index of the Conference Board increased to 113.15 in December from November’s downwardly revised 112.48.
Thus, with things looking up for the labor market, and the indicator of future job growth strengthening, it’s judicious for investors to place bets on staffing companies like Staffing 360 Solutions, KornFerry International and Robert Half Inc. that can make the most of the promising employment scenario.
These stocks that flaunt a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Staffing 360 Solutions is engaged in a global buy-and-build strategy through the acquisition of staffing organizations in the United States.
The Zacks Consensus Estimate for its next-year earnings has moved up 50% over the past 60 days. STAF’s expected earnings growth rate for the current year is almost 55%.
KornFerry International is the world's leading and largest executive recruitment firm.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.9% over the past 60 days. KFY’s expected earnings growth rate for next year is 8.9%.
Robert Half is one of the world's largest providers of professional consulting and staffing services.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.8% over the past 90 days. RHI’s earnings growth rate over the past five-year period is 15.1%, while its estimated earnings growth rate for the next five-year period also remains positive.
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Korn/Ferry International (KFY) : Free Stock Analysis Report
The Andersons, Inc. (ANDE) : Free Stock Analysis Report
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Staffing 360 Solutions, Inc. (STAF) : Free Stock Analysis Report
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