Why Rentech (RTK) Might Be a Diamond in the Rough - Tale of the Tape
March 26 2014 - 8:00AM
Zacks
It can be very difficult to find companies that are both flying
under the radar, and still might have potential for gains. Many
times, stocks are off investors’ radar screens for a reason, though
there are some hidden gems that could be worth uncovering by those
with a high risk tolerance.
One way to find these underappreciated stocks is by looking at
companies that haven’t seen their share prices move higher lately,
but have observed analysts raising earnings estimates for their
stock. This trend could signal that investors haven’t quite
embraced the rising estimate story yet, but that the potential for
a big move higher is definitely there.
One such company that looks well positioned for a solid gain, but
has been overlooked by investors lately, is
Rentech,
Inc. (RTK). This bio-fuel stock has actually seen
estimates rise over the past month for the current fiscal year by
about 33.3%. But that is not yet reflected in its price, as the
stock lost 1.6% over the same time frame.
You should not be concerned about the price remaining muted going
forward. This year’s expected earnings growth over the prior year
is 214.29%, which should ultimately translate into price
appreciation.
And if this isn’t enough, RTK currently carries a Zacks Rank #2
(Buy) which further underscores the potential for its
outperformance (See the performance of Zacks' portfolios and
strategies here: About Zacks Performance).
So if you are looking for a stock flying under-the-radar that is
well-equipped to bounce down the road, make sure to consider
Rentech. Solid estimate revisions and an impressive Zacks Rank
suggest that better days may be ahead for RTK and that now might be
an interesting buying opportunity.
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