Nalco Rises After Analyst Names Stock As Top Pick

NEW YORK (AP) — Shares of Nalco Holding Co. advanced Monday after an analyst made the water treatment company his "top pick" among chemical companies because of cost cutting and the benefits of a restructured European operation.

Citi Investment Research analyst P.J. Juvekar made the stock his "Top Pick in Chemicals" saying the Naperville, Ill., company "is poised for outperformance."

That outperformance should come from stronger growth in the company's Brazilian, Russian, Indian and Chinese markets, a restructured European water business and $100 million worth of cost cutting, the analyst said.

Juvekar, who has a "Buy" rating on the shares, said Nalco's new CEO, Erik Fyrwald, is working successfully to improve working capital management and boost cash generation.

"We believe steadier earnings performance and cash generation could result in multiple expansion," he wrote in a client note. "Investors need to be convinced that Nalco is a 'consistent grower' taking advantage of long-term secular trends in water treatment and energy services."

In morning trading, the shares gained $1.31, or 6.9 percent, to $20.48. Over the last 52 weeks, the stock has ranged from $7.80 to $21.05, and is up 66 percent since the start of the year.