Value Stock: Quaker Chemical (KWR)

Quaker Chemical Corporation (KWR) has surprised 6 quarters in a row as its stock has rebounded along with the global economy.

Quaker manufactures process chemicals and specialty chemicals for the manufacturing industry, including primary metals, metalworking and other basic process industries. The company also provides management services for steel companies around the world.

Headquartered in Pennsylvania, it also has regional headquarter locations in the Netherlands, Brazil and China. It has a business presence in every major manufacturing country in the world.

Quaker Beat By 48% in the Second Quarter

It was another quarter of solid earnings in the second quarter as earnings per share of 80 cents blew by the Zacks Consensus of 54 cents on July 28. It made just 29 cents in the year ago quarter.

Quaker still believes it will report record earnings in 2010.

Revenue rose 33% to $136 million from $102.3 million. With its increased presence in Brazil and China, two of the fastest growing economies, it has been able to recover quickly from the global recession.

It saw double-digit volume increases around the world. Product volumes rose 42%.

For the first six months of the year, the story is equally as bullish as revenue jumped 32% to $264.3 million from $200.8 million in the first half of 2009, during the worst of the financial crisis. Like the second quarter, volumes spiked in the first half across the globe.

Zacks Consensus Estimates Move Higher

Zacks didn’t given any specific guidance on actual revenue or EPS but it was optimistic about the rest of the year.

“Our expectations for the second half are that our earnings will continue to be strong but will be below the first half due to a softening in demand and the lag effect on margins as we recover higher raw material costs,” said Michael Barry, Chairman and CEO.

Value Fundamentals

Quaker Chemical is beating its industry on value fundamentals. It is trading at 12.4x forward estimates whereas the industry is at 14.3.

Its price-to-sales ratio is also in the value territory at 0.7, under the industry of 0.9.

The company sports an attractive return on equity of 19.2%, above the industry average of 13.7%.

Quaker Chemical is a Zacks #1 Rank (strong buy) stock.

QUAKER CHEMICAL (KWR): Free Stock Analysis Report

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About Tracey Ryniec 60 Articles

Affiliation: Zacks Investment Research

Tracey Ryniec is the Value Stock Strategist for She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at

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